WTI Crude Daily Update for September 30, 2016

WTI crude oil prices moved higher on Thursday as traders continued to absorb the news that OPEC had agreed on a production cap at 32.5 million barrels a day. This would theoretically reduce the number of barrels produced by 700K barrels a day.  If this really occurs, OPEC will have shifted its strategy to one of price protection as opposed to gaining market share.

Resistance is seen near a downward sloping trend line that connects the highs in May to the highs in August and comes in near 48.10.  Support is seen near the 10-day moving average at 45.29.  Momentum has turned positive as the MACD (moving average convergence divergence) index generated a buy signal. This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread. The index moved from negative to positive territory confirming the buy signal.