- WTI prints four-day winning streak after refreshing two-month high the previous day.
- Saudi Arabia stands ready to balance the oil market, cited covid burden on demand, OPEC+ looks to delay supply increase.
- US dollar strength, cautious sentiment challenge the upside moves.
- EIA Crude Oil Stocks Change likely to recover in the week ended on November 06.
WTI steps back from the intraday high while declining to $41.94, up 0.40% on a day, during the early Thursday. The black gold recently gained bids as headlines concerning the demand-supply outlook triggered a bit of optimism. However, the US dollar strength and challenge to the risk probe the oil buyers.
Saudi Arabian King Salman’s comments citing efforts to guarantee oil supply stability amid the coronavirus (COVID-19) times initially weighed down the energy benchmark before bouncing off on the hints of Saudi-Iran tension.
Following that, Bloomberg came out with the news suggesting that the OPEC+ leaders are set to delay the planned hike in oil supplies by the major producers by three to six months. The oil major including Russia was initially expected to announce the gradual reduction in the output cut plan in early 2021.
The US dollar index (DXY) stays positive near one week high as risks dwindle on the COVID-19 woes, Sino-American and the Aussie-China tensions. Also weighing on the greenback could be the recently weaker US 10-year Treasury yields, currently down five basis points (bps) to 0.937%.
Moving on, the weekly official oil inventory update from the Energy Information Administration (EIA) will provide more clarity to the energy bulls. The forecasts suggest improvement in the stockpile from -7.998M to -0.913M, which if matched could probe the WTI buyers.
Technical analysis
Break of an ascending support line from Monday probes a three-day-old horizontal line around $41.55, which in turn holds the gate for further weakness towards a joint of 200-bar SMA and a nine-day-old rising trend line, at $39.50 now.
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