- WTI has been good two-way business on Thanksgiving Thursday with the price dropping in European trade from $54.72 to a low of $53.58, then back to $54.84 and back to $53.73.
- WTI is currently trading at $53.95 in a correction from the lows, pressured by continued oversupply sentiment.
WTI has been in decline since the start of October, falling from $76.82 with little in the way of support over consecutive days and in a sea of red due to a surge in supply as well as global growth concerns. This has coincided with a rise in the US dollar that has climbed from 94 to 96.69 the high over the same time period in the DXY. However, to counter the surge in supply, OPEC is considering a deal to cut production when it meets next month on December 6th. However, there is some resistance to such a move starting with Iran and then Russia, an ally of OPEC, unlikely to participate.
At the same time, the United States of America has been pressuring OPEC’s biggest exporter, Saudi Arabia, not to take action next month. “Oil prices getting lower. Great! Like a big Tax Cut for America and the World. Enjoy!… Thank you to Saudi Arabia, but let’s go lower!” U.S. President Donald Trump tweeted on Wednesday. So the question is by how much production will be cut?
U.S. inventories swelling to their highest levels this year
The latest drop in prices came on the back of U.S. inventories swelling to their highest level since December last year, adding to concerns about a global crude glut. The Energy Information Administration reported that domestic crude supplies rose for a ninth straight week, well above expectations. Trading has also been thin due to Thursday’s Thanksgiving holiday in the United States which can lead to move volatile price action.
WTI levels
The price is well oversold according to RSI although there is room to go until the 200-W SMA at $52.12. At the moment the barrel of WTI is gaining 1.49% at $53.88 and bulls need to get back above $57.80 (10-day SMA) ahead of $61.59 (21-day SMA) and $67.85 (high Oct.29). On the flipside, $52.61 (2018 low Nov.20) guards $52.54 (monthly high Sep.28 2017) ahead of $48.92 (monthly low Oct.6 2017).
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