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WTI snaps three-day uptrend beyond $75.00 ahead of OPEC meeting

  • WTI refreshes intraday low as bulls take a breather around multi-month high.
  • Market sentiment stays firmer but hopes of supply increase from OPEC weigh on energy prices.
  • China off, Evergrande fears and tapering tantrums also challenge the oil bulls.
  • US Factory Orders, OPEC meeting eyed for fresh impulse.

WTI remains pressured around the intraday low $75.33, down 0.12% on a day, as oil traders brace for the OPEC meeting on early Monday.

The black gold consolidates recent gains amid chatters over the easing of the output restriction norms among the major energy producers. Even so, softer US dollar and risk-on mood keep the commodity buyers hopeful.

Given the supply disruption and hopes of an increase in energy demand, mainly due to the global easing of virus-led activity restrictions, WTI bulls touched the highest in three years last week. Also favoring the upside momentum were the softer US Dollar Index (DXY) and the Treasury yields.

Hurricanes have hit the Gulf hard and the markets are bracing for brighter days after the pandemic, with more travel and activities leading to higher demand. The same helps the Organization of the Petroleum Exporting Countries (OPEC) to expect, in its monthly report, that the world oil demand will exceed pre-pandemic levels and average 100.8 million barrels per day (BPD), as reported by Reuters.

This helps the OPEC board to aim for supply increase as the prices poke multi-month tops and the supply issues are likely to take longer. Amid these plays, Reuters said, “The OPEC and allies led by Russia, known as OPEC+, agreed in July to boost output by 400,000 barrels per day every month until at least April 2022 to phase out 5.8 million BPD of existing cuts. Four OPEC+ sources told Reuters last week producers were considering adding more than that deal envisaged, but none gave details on how much more, or when supply would increase.”

It should be noted that hopes of US stimulus and expectations of China’s further action to safeguard investor interest amid the Evergrande drama underpin mildly risk-on markets even as Beijing is off for a National Day holiday. That said, the S&P 500 Futures rise 0.22% by the press time while the US 10-year Treasury yields drop 1.1 basis points (bps) to 1.456% at the latest.

Moving on, the OPEC verdict will be the key for the WTI oil traders while US Factory Orders and the aforementioned risk catalysts can offer intermediate moves to the black gold prices.

Technical analysis

A daily closing beyond the $76.00 becomes necessary for the WTI crude oil buyers to aim for October 2018 peak surrounding $76.80, until then a six-week-old rising support line near $74.20 should be watched carefully for targeting the commodity’s consolidation.

Additional important levels

Overview
Today last price75.42
Today Daily Change-0.17
Today Daily Change %-0.22%
Today daily open75.59
 
Trends
Daily SMA2071.77
Daily SMA5069.77
Daily SMA10069.98
Daily SMA20064.44
 
Levels
Previous Daily High75.82
Previous Daily Low74.06
Previous Weekly High76.51
Previous Weekly Low73
Previous Monthly High76.51
Previous Monthly Low67.02
Daily Fibonacci 38.2%75.15
Daily Fibonacci 61.8%74.73
Daily Pivot Point S174.49
Daily Pivot Point S273.4
Daily Pivot Point S372.73
Daily Pivot Point R176.25
Daily Pivot Point R276.91
Daily Pivot Point R378.01

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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