Hey guys,

After meeting in Vienna, Austria, Iran and an OPEC conglomerate led by Saudi Arabia look to go head to head in a battle over global oil supply. If you drive a car and your wallet has been feeling the pinch lately, you’re going to want to continue following this narrative.

So with global oil supply controlled by such a small number of countries holding all the cards within essentially the cartel known as OPEC, all the power rests with them. Within OPEC, the big two are always Iran and Saudi Arabia and when they go head to head, markets get unpredictably erratic.

What we’ve seen here is Iran going head to head with the Saudis at the latest OPEC meeting in Vienna by rejecting a potential compromise on supply that would see a small production increase. The bottom line being of course cheaper fuel and energy for the end consumer like you and I.

Just like anything in markets, this is all politically motivated, with Saudi Arabia trying to appease the United States by helping consumers and Iran quite happy to do everything they can to fuck them over.

If you follow US President Donald Trump on Twitter (and come on, who doesn’t), you’ll have noticed that he’s Tweeted a couple of times lately about how high oil prices are and suggesting that OPEC are the cartel that they are, but a politician isn’t meant to say. Understandably, Iran are not happy about this.

“OPEC is an independent organisation not an organisation to receive instruction from President Trump. OPEC is not part of the Department of Energy of the United States.”

Would you like some Ice with that burn, Donald?

Well it seems like a deal between the Saudis and Iran isn’t going to be reached and that just means more uncertainty for oil markets.

Take a look at the charts:

CL Daily

I love this oil daily chart. If you follow this blog then you’ll remember we were trading that triangle breakout that coincided with trend line support holding and ran it up nicely.

Well now you can see that exact same higher time frame support zone is now acting as obvious resistance after the trend line has broken to the down side.

For me, I still get a cool feeling seeing price reactivate old zones or levels and you know that you’re in tune with what the market is doing.

CL Hourly

I’ve just included the hourly at the end here to show how price has reacted all the way to the ends of the zone, but still managed to hold.

So long as oil is controlled by OPEC featuring a small number of politically motivated, unpredictable countries, the price of oil is going to remain driven by headlines. This opens us up to spikes, but by keeping on the right side of key higher time frame levels, then you can keep yourself fairly safe and hopefully put yourself in a position to take advantage when the spike goes your way.

If you’re not in, then you can’t take advatage.

✌🏻.

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