Oil is down by more than 1% on the day now
The 'buy the rumour, sell the fact' play is still very much in motion as oil is getting no reprieve at all from the fact that OPEC+ sealed a nine-month extension to the current output cuts deal, which was announced on Tuesday.
Oil fell hard on the day itself before a slight recovery amid risk-on sentiment overnight but the fall is resuming now with prices down by almost 1.3% currently.
The move higher in oil during June in anticipation of the OPEC+ decision failed to breach key resistance levels with the daily moving averages and the trendline resistance from April-May helping to limit gains and kept sellers in the game.
As such, we're seeing sellers seize further control now and the fact that OPEC+ has done just a little above the bare minimum isn't going to convince markets that the oversupply issue in 1H 2019 will go away in the 2H 2019.
As mentioned last week, the oil market needs a higher commitment of production cuts from OPEC+ in order to try and curb the current issue but since that didn't come about, oil could be set for a rough time in the second half of this year.
Looking at the near-term picture:
The risk for sellers lie in the key hourly moving averages around $58.30-33 with the next key support level being at $56.00.
