Crude Oil just had it's largest weekly up move since a 4.7% move the week of September 11th. The high last week of $59.05 was crude oil's highest price print since June 26th. Even though it failed to reach the $60 level, it closed the week on the highs ($58.97). According to the latest CFTC Commitment of Traders report (November 17th), speculators increased their net long positions to a new record. The previous record was reached the last week of February and in the first week of March crude fell 8.1%. Is crude ready for a leg lower? Possibly.
There is an OPEC meeting scheduled for November 30th and most people expect the result to be the announcement of an extension to production cuts, which were set to expire March of 2018. Russia is the key, as a simple agreement within OPEC won't be an effective extension. Two months ago, Russian President Vladimir Putin expressed support for the extension of cuts, but more recently Russian oil ministers had a "what's the rush" attitude, arguing that it is too soon to consider an extension. Russia’s energy minister Alexander Novak said: “January is the earliest date when we can actually, credibly speak about the state of the market.”This past week, however, multiple news outlets reported that OPEC and Russia had crafted the outline of a deal to extend production cuts to the end of next year according to people involved in the conversations. The OPEC meeting is now a release of details and there is a good chance they disappoint. With such a high level of long interest in crude and the price closing on its highs, look for some selling after the EIA figures on Wednesday and potentially a major disappointment in the OPEC meeting details. With price hovering above $50 for the majority of the last 2 1/2 months, rig counts are starting to turn and US production will continue rising. If the market does not get what it wants on November 30th, look about below for the price of WTI crude oil.