WTI better-bid into Wall Street closing-hour, buoyed by OPEC+
|- WTI prices edging higher within the ascending channel.
- Bulls cheering the OPEC+ production cuts while price trades above 50% mean reversion and confluence level.
Oil was a touch firmer on Tuesday with West Texas Intermediate crude up 0.56% to $59.49/bbl on the day. However, elsewhere, the market's were less active as investors wait for bigger fish to fry later in the week. There have been the usual conflicting trade headlines which markets seem to have started to ignore.
The latest came in the Wall Street Journal which stated that unnamed officials from both sides of the negotiations were reporting that they were laying the groundwork for a delay in a fresh round of tariffs set to kick in on the 15th December. The WSJ reported that both sides were continuing to “haggle over how to get Beijing to commit to massive purchases of US farm products President Trump is insisting on for a near-term deal.”
OPEC is a bullish development for energy markets
Meanwhile, deeper production cuts by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, which were agreed last week in Vienna, remains a bullish outcome for the energy markets as reflected in the reaction in the price of oil. An extra 500,000 barrels a day from oil production beginning in January will be taken off the market, which brings total cuts to 1.7 million barrels.
Analysts at TD Securities explained that "energy markets have found their footing in the aftermath of OPEC's 'beautiful surprise'. While the cartel ultimately managed to deliver a positive surprise — thereby decreasing the market's expectation for oversupply — inventories are still set to grow in the coming quarters."
WTI levels
The price is rising in an ascending channel and beyond a 50% mean reversion of the September swing highs and early October swing lows in the 58.60s. A continuation opens the confluence of a 78.6% retracement of the same range and the July peaks around 60.80. A break to the downside, however, opens the 200-day moving average and that 50% retracement confluence around 57.20.
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