Production cuts, Fed pause bets excites Oil prices

Oil prices stretched their gains from last week as markets got excited by the news that OPEC would extend production cuts into October and expectations that the Fed could be done with hiking rates. Saudi Arabia is expected to extend the production cuts of 1 million barrels per day into October with other OPEC members set to give the green light as they support prices with tight supply. Last week, the inventory drawdown on US stockpiles saw oil prices maintain a 3-day bull run with the jobs report adding further support. Investors expect the Federal Reserve to hold rates this month as the latest NFP report indicates the labor market is showing signs of cooling down.
The USOILSPOT has exited a 9-month resistance to create a new high after rebounding from $77.60. Traders should anticipate a pullback towards the $82-$83 price level to join the bullish trend.