Brent oil takes a breather after 9% rally

Brent oil is trading in the sideways manner in Asia after the first OPEC output cut deal since 2008 led to a 9% rally in prices on Wednesday.

Is OPEC deal a long run positive for oil?

OPEC deal could turn out to be positive for oil market in the long run only if the non-OPEC supplies do not rise in response to the rise in the prices.

Moreover, the OPEC deal also calls for a reduction of about 600,000 barrels a day by non-OPEC countries.

In case, the non-OPEC members do not cooperate, the OPEC could give up its pledge to cut supplies, thus leading to a sell-off in oil prices.

Brent oil technical levels

Brent was last seen trading around 51.50/barrel. A break above $52.00 (zero figure) could yield a re-test of the previous day’s high of $52.33. On the lower side, breach of support at $50.72 (Aug 26 low) would expose the psychological support of $50.00.