The phrase ‘buy the rumor, sell the news' is overused on Wall Street for a reason. Prior to significant events, prices tend to rise on rumors and then drop sharply following a highly anticipated event. Looking at WTI, the last OPEC meeting (May 25, 2017) is a great example of this pattern.

Rumors of deeper OPEC cuts ultimately unfounded

The market front runs the OPEC announcement

Source: NYMEX futures / TradingView.com

The stakes are much higher today

Given price action in crude the last time, the stakes today are much higher for three reasons.

Firstly, speculation is rife that another supply cut is imminent following King Salman's landmark visit to Russia earlier this year. As the first Saudi monarch to visit Russia, the event was significant as the two countries are supporting opposite sides in the ongoing Syrian conflict. Russia has also been a traditional ally of Iran, Saudi Arabia's arch nemesis in the Middle East. Despite the historical differences, the two countries appear to be cooperating as higher crude oil prices are in everyone's interest. The event was marked by significant pomp and ceremony, and Saudi Foreign Minister Adel al-Jubeir claimed that “relations between Russia and Saudi Arabia have reached a historical moment.” Following the event, expectations are high that another OPEC/Russia supply cut extension is in store.