- WTI drops over 1.0% intraday while keeping the three-day-old trading range.
- OPEC struggles over output hike delay, China PMIs came in better than forecast in November.
WTI wavers around $45.15, down 1.25%, during the early Monday’s trading. The energy benchmark has been trading between $44.62 and $46.30 after refreshing the highest since March during last Wednesday.
In doing so, the energy benchmark refrains from respecting upbeat news from the monthly Joint Ministerial Monitoring Committee (JMMC) by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, mostly known as OPEC+. The group conveyed an inability to agree over the planned easing of reduction in output.
While the coronavirus (COVID-19)-led declines in energy demand could be the reason behind the moves, or lack of moves, the OPEC+ meeting is yet to convey the final decision.
Elsewhere, vaccine hopes fail to keep the bulls happy for long as traders await actual delivery of the pandemic’s cure is still pending while the tussle between China and the West suggest fresh trade/political tensions. It’s worth mentioning that China’s November month official activity data came in better than forecast. Details suggest that NBS Manufacturing PMI grew past-51.5 forecast and 51.4 previous to 52.1 while the Non-Manufacturing PMI crossed 56.2 prior and 52.1 expected with 56.4.
While mixed sentiment concerning risks and the US dollar weakness trouble oil traders, OPEC+ decision will be the key to watch going forward. The major oil producers will convey the key meeting starting Monday and are likely to agree on the extension of the production cut.
Technical analysis
The energy benchmark stays on the bull’s radar as it remains strong beyond the 61.8% Fibonacci retracement of January-April downside, near $43.65. As a result, the WTI bulls are targeting the March month’s high of $48.74 amid bullish MACD. However, an upward sloping trend line from March 11, currently around $49.30 and the $50.00 threshold can challenge the bulls afterward.
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