If OPEC+ couldn't reach a deal, WTI could fall to $40

WTI Cover



Firstly, Saudi Arabia will ensure that the output cuts deal will be extended so there is no need to panic. However, whether or not that extension will include Russia remains to be seen.

Even though Russia has hardly made a contribution to the deal - they basically have only one foot in the circle - it's more of a symbolic gesture that OPEC + deal extension would involve them or otherwise the mere appearance of the deal will be undermined.

As it stands, the current output cuts quota - alongside issues / sanctions with Iran and Venezuela - is still not enough to stem the oversupply issue in the oil market as seen so far in 1H2019. Hence, OPEC members are left with little choice but they continue to pursue this course of action if they do not want oil prices to collapse.

The oil market is more or less priced in a deal to be done now after all the comment from Saudi Arabian oil minister, Khalid Al-Falih, over the past week.

But as I mentioned, if this does not include Russia, expect it to hit the markets at least a bit, although it is more a symbolic move that extends the deal. Here's what the market looks like today:

WTI Daily Chart

 Trader Aleksandar Kumanov

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