WTI holds $45 as OPEC+ postpones output cut decision to Thursday
|- WTI keeps recovery moves from $44.51 despite multiple failures to regain $46.00.
- OPEC to discuss output cut proposal internally, on Tuesday, before discussing it with allies on Thursday.
- US dollar recovery fades on comments from Fed Chair Powell, Treasury Secretary Mnuchin.
- China Caixin Manufacturing PMI, API data and OPEC updates will be important to watch.
WTI prints mild gains above $45.00, currently around $45.25, during the early Tuesday’s trading. The oil benchmark dropped to the one week low on the previous day amid the US dollar recovery. However, recent news suggesting a further delay in the OPEC+ decision on output cut helps the black gold buyers to remain hopeful.
Having failed to arrive on any production-linked decision during the Joint Ministerial Monitoring Committee (JMMC), the Organization of the Petroleum Exporting Countries (OPEC) members need one more day of discussion among them and battle the push for the output increase. Following that, the leaders will approach their allies to convey the OPEC+ decision on Thursday, per Reuters.
With the coronavirus (COVID-19) likely to keep the Q4 economics pressured, oil producers are likely jostling over the push to step back from the earlier caps on the flow.
Elsewhere, the US dollar bulls witness another drawback as Fed Chair Jerome Powell and Treasury Secretary Steve Mnuchin both pushed for further stimulus to battle the moderating economic growth during their prepared remark for Monday’s testimony.
Looking forward, China’s November month Caixin Manufacturing PMI, expected 53.5 from 53.6 can offer immediate direction to commodity prices ahead of the weekly inventory data from the industry source, the American Petroleum Institute (API), prior 3.8M. It should also be noted that the US ISM Manufacturing PMI and risk catalysts are extra catalysts WTI trades should watch.
Technical analysis
Unless declining below the August high near $43.10, oil bears are less likely to enter. Meanwhile, upside momentum needs to cross the November high of $46.30 to keep the WTI buyers hopeful.
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