Is oil on the verge of a big decline?

From Justin Brill, Editor, Stansberry Digest:

On Monday, oil cartel OPEC was in the headlines again after reporting it had slashed its production by nearly 900,000 barrels per day (“bpd”) last month. As the Wall Street Journal reported…

OPEC’s January oil production fell by 890,000 barrels a day compared with December, the cartel said Monday, confirming that its members have so far largely complied with an agreement to slash output.

Data from secondary sources showed that the cuts agreed on Nov. 30 by the Organization of the Petroleum Exporting Countries have been implemented. Production from OPEC members in January was 32.139 million barrels a day compared with 33.029 million bpd in December.

OPEC also raised its forecast for global oil demand to 1.2 million bpd this year, which would be “well above” the 1 million bpd average over the last 10 years.

The message is clear: OPEC is doing its best to “talk up” oil prices. Only, as you can see in the chart below, it hasn’t been working…

After jumping higher following initial news of OPEC’s deal, prices have been stuck in a trading range ever since. Despite ongoing reports that that OPEC members were cutting production as promised, prices have essentially gone nowhere. And when markets stop rising on good news, it can be the first warning of an impending reversal.

We’ve discussed the bearish implications of extreme trader sentiment and rising U.S. shale production… If OPEC falls even a little short of its promises, prices could plunge.

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