- WTI fades a spike to $41.45, still in monthly highs.
- US oil trades flat amid China GDP miss, positive equities.
- OPEC+ to discuss weakening oil demand outlook.
WTI (futures on NYMEX) is off the monthly highs of $41.47, posting small losses around the $41 level, as investors look to take profits off the table ahead of the OPEC and its allies (OPEC+) meeting due later on Monday.
The pullback from multi-week highs can be mainly attributed to the Chinese Q3 GDP disappointment. The Chinese economy expanded less-than-expected in Q3, underscoring concerns over the demand for oil from the world’s second-largest oil consumer.
Despite the retreat, the sentiment around the higher-yielding oil remains underpinned by the upbeat market mood, as markets remain hopeful of a potential US fiscal stimulus and coronavirus vaccines.
Further, the risk-on rally in the global markets weighs on the safe-haven US dollar, in turn, benefiting the USD-sensitive black gold. A weaker greenback makes the dollar-denominated oil cheaper for foreign buyers.
Also, backing the bullish case in the WTI barrel, the OPEC+ is set to meet today to discuss the weakening oil demand outlook, in the face of the coronavirus resurgence on both sides of the Atlantic. The OPEC+, which includes top producers – Saudi Arabia and Russia, is also likely to talk about the increased Libyan oil output.
Although the OPEC+ is unlikely to recommend any immediate action to tackle the dwindling demand prospects, any measures/ comments to support the prices could offer fresh zest to the WTI bulls.
WTI Technical levels
“Following that, September 04 high near $42.10 holds the key to the commodity’s further upside towards the late-August lows surrounding $43.50. Alternatively, a downside break of the nearby support line, at $40.78 now, can recall sellers to attack the $39.70-60 support zone comprising 200-bar SMA and the triangle’s support,” FXStreet’s Analyst Anil Panchal explained.
WTI Additional levels
Share
