Crude oil moved higher on Tuesday this week after Saudi Arabia and Russia both opted to extend their voluntary production cuts. Saudi extended its 1 million barrels per day cut for three months to include October until year end, which was a surprise as analysts were expecting only a one month extension to the production cuts.
Furthermore, Russia also extended their reduction of oil exports until the end of the year by 300,000 barrels per day until year end. These moves are supportive of oil in the near term however, notice that seasonally there is a very weak period coming up for oil with October and November being the weakest months of the year for returns over the last 25 years.
So, will oil prices buck these seasonal trends or should traders be ready for a coming correction after a run of higher prices?
Major Trade Risks:
The major trade risk is that seasonal patterns do not necessarily repeat themselves each year and OPEC+ is intervening with production levels to try and support prices as best as it can.
Remember don’t just trade it, Seasonax it!