Attractive levels of oil for buying do not leave many traders alone. Yesterday I spoke about the planned meeting of Donald Trump with representatives of the largest US oil companies, which led to a slight price increase. However, closer to the middle of the North American session, the American president said that he had a conversation with Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin about stabilizing the oil market, which led to a price appreciation of more than 20% from $21 per barrel to $27 per brand WTI. Brent did jump right away at $10. According to Trump, it is likely to reduce oil production to 10 million barrels per day.

The American leader tweeted that the Saudi Crown Prince had a conversation with President Putin, but this information was not confirmed, as the Kremlin said there was no such conversation. Despite all this, Saudi Arabia convened an extraordinary OPEC meeting after a conversation with Trump, saying it was considering reducing production to less than 9 million barrels per day, but on condition that other countries join the reduction. We are talking about manufacturers in the United States, Canada, Mexico and other countries of the Big Twenty. The meeting to stabilize OPEC oil prices is scheduled for April 6 via video link.

After such news, many started talking about the hope of a truce in the price war between Russia and Saudi Arabia, which did not start at the right time, which is in the midst of the spread of coronavirus.

However, counting on the rapid growth of quotes is currently not entirely correct. One of the reasons is the crisis, the scale of which is not yet fully understood, which will necessarily affect limited demand. The second reason is the rapid filling of oil storage facilities amid a sharp collapse in oil demand. Due to the closure of many enterprises operating with oil in various directions, it will be physically impossible for Saudi Arabia and Russia to withdraw 10 million barrels per day from the market. For this reason, the requirements for joining the agreement of a number of other countries are also understandable.

As for the technical picture of WTI oil, a major resistance is located in the area of 27.50 US dollars, a breakthrough of which can form a sharp jump in prices up to the highs of 32 and 35.50 dollars per barrel. It is important to note that so far no decision has been made to reduce production, conversations and proposals have remained so. If this topic comes to naught, quotes will quickly return to their annual minimums in the region of $20 per barrel. Therefore, it is not worth rushing to open long positions at current attractive levels, even at $24, only if you are not ready to stay the drawdowns to $17-$15 per barrel, or even 12. It is another matter if, following the negotiations, many countries agree to make concessions and reduce their production, which will be a clear medium-term signal to strengthen black gold, at least from the lows that are ruining exporting countries.