Oil prices reversed an earlier slide after Iran reportedly told OPEC that they will attend the Algiers meeting oil production meeting in September. The next OPEC meeting is scheduled to take place on Nov 30th, however oil producers are planning on meeting on the sidelines of the International Energy Forum in Algeria on September 26th. Later in the US session, an Iran Oil official noted that he cannot confirm whether Iran will attend the upcoming meeting.
Oil prices also lost some of those gains following the weekly API oil inventory data. US crude inventories climbed by 4.5 million barrels, much higher than the analyst expected 500,000 and also the largest build since April.
Price action on the US oil daily chart shows that the key resistance remains the psychological $50 handle. Price may have limited upside here and if we see a decline back below the 50-day SMA, we could see continued selling pressure target the $42.50 area. If we see further weakness, major support will come from the $40.00 to $40.99 trading range. If we see bullish momentum take out the noted $50 level, initial resistance may come from the $52.50 level.
The trade: Sell US oil at $48.25, with a stop loss at $49.25 and take profit at $45.25. The risk/reward ratio is 1:3