Qatar leaving the OPEC isn’t a great news for the oil market. The markets have not reacted to this development yet because this move threatens to fracture the cartel’s unity. Basically, Qataris have brought the biggest weapon out and it only means more instability between the Qatari and Saudi relationship. In fact, there may not be any surprise if other counties start to follow the same path and then we have no control over supply or demand as each individual country could just do what they like. This simply means the end of OPEC.
Yes, for now, there is optimism that Saudi Arabia and Russia are committed to keep the supply under control. This has jolted the price of oil higher especially the fact that Canada’s largest oil-producing province is curbing the output.
In terms of technical analysis, the price is trading below the downward trend line and this confirms that the trend is still skewed to the downside. However, the bullish signs are merging this is because the Brent price has entered back in into the downward channel after breaking it to the downside.
The RSI has experienced a sharp spike after plunging below the 30-mark and this is another bullish sign.
