Why is OIL ripping? Read some thoughts and affecting factors to not get caught off guard.

Good morning traders! A move that has no doubtedly left many baffled and with empty hands, oil price is ripping.

There is the Saudi purge that has changed the fundamental structure of the state, as Reuters puts it.

Because of the delicate political situation, "Saudi Arabia will prefer to risk tightening the oil market too much rather than too little", according to them.

_{The last passages summarise thoughts on political ripples into economy and oil prices}

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Ellen R. Wald, however, offers 5 other reasons for the oil climb. Check her post out on Investing.com. According to her, it's more OPEC related then any power play. But the underlying theme is same - tightening the market and more OPEC nations favoring the cuts. Of course, by now most of us know, that the cuts are a farce. Apparently some (maybe even most) OPEC members fake higher production numbers, so that the production % cuts wouldn't really affect them. (Note: i have no source to cite right now, out of the top of my head, so take this last part with a pinch of salt).

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In other related news, Saudi Arabia accuses Lebanon of "declaring war against them", via aljazeera. If nothing else is happening, yo can be sure there is always something boiling in the Middle-East.

The WTI price broke out on the daily chart. But wait! Look at the RSI. Historic levels. Be very cautious taking a long position amongst these bullish news all around. Don't want to be a bag holder, do you?

WTI weekly chart. We are a smidge away from hitting the 200-week moving average, which, as you see, has produced reactions in the past.

WTI futs. Out of the top of my head i dont know if i am quoting the currect contract chart, as i don't trade futs, but you see we closed a big important gap yesterday.

Add in the bullish sentiment to the mix and you get a recipe of a nasty pullback. When or where? Who knows, but it's coming. Be careful trading oil. Trade safe everyone!

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