Oil making major moves as full markets return for 2017 action

Oil has dropped like a barrel of a cliff on the back of the market getting nervous about the accord between OPEC and non OPEC members. This came after after the price was actually testing their highest levels in about 18 months.

WTI dropped from $54.61 highs down to $51.62 with the strength in the U.S. dollar that has also been a major factor as traders return and back the bid while algos lead the way, with momentum a major catalysts to the move. We are in for a wild ride in 2017 and there should be a steady advance in the greenback with a large shortage of dollars on the offshore market underpinning demand and strength as we await politics in European markets and Trump to be major variables affecting the price of the dollar, inflation and oil. 

The major risk is whether the Organization of the Petroleum Exporting Countries and other major producers can all abide by an agreement to curb output and not be tempted to break the agreement as the price of oil rallies and they wish to cash in and take advantage of that scenario. 

Here, we touche don Oil before the holidays and raise a number of scenarios: