WTI crude is trading at $59.9/barrel, down from its recent high of $61.5/barrel, made yesterday. Bulls tried to make an attempt to break above the Doji highs made over the last few weeks. However the attempt failed, as traders are playing it cautiously as OPEC producers meet at summit in Vienna. Brent WTI spread squeezed further by 60 cents, currently trading at $4/barrel.

Ministerial meeting is scheduled on Friday, when oil ministers from OPEC countries will be discussing their strategy and production levels.

OPEC is likely to maintain production target at record level, close to 30 million barrels/day. However, the threshold can further be raised since OPEC production is crossing the level on regular basis.

Oil price could drop further if OPEC producers pose optimism over current strategy and remains united over lower price to push high cost producers out of the market.

However once concern hovers, current lower price of oil carrying little risk premium amid Middle East turmoil. Saudi Arabia and Iran remain at loggerheads over controlling Yemen. Saudi Arabia continues to bombard Yemeni rebels. Another threat which is not properly accounted for is advance of terrorist group Islamic State (ISIL/ISIS) in Middle East, namely Syria.

Once the supply glut diminishes, these issues might come into focus.

WTI is likely to drop towards $51/barrel, if doji high is not taken out at $62.75/barrel.