Oil prices making tracks to key 61.8% Fibo target, boosted by OPEC sentiment

• Oil was lifted on the sentiment that OPEC sentiment.
• Bulls knocking on the door of a 61.8% Fibo retracement target confluence area.

Oil prices have been trading on the bid over the past twenty-four hours, with West Texas Intermediate crude, (WTI), rising from a low of $56.59 to a high of $58.25, adding 1.91% at the time of writing as investors bank on production cuts from the Organization of the Petroleum Exporting Countries, (OPEC), and its allies. 

At the time of writing, WTI is trading at $58.15 and close to its highest levels of the day so far despite US benchmarks in the red. While there had been a report earlier in the Wall Street Journal which stated that China’s top trade negotiator invited his U.S. counterparts to a new round of face-to-face talks, stocks were unable to garner much impetus from that and instead investors are more concerned over a number of prior headlines in the week so far that are quite to the contrary of such optimism.  For oil, we had news that Yemeni Houthis claimed to shoot down a Saudi coalition F-15 which helped boost oil prices. Also, US inventory builds were not as bad as expected.

WTI gets a boost on OPEC

Oil was also lifted on the sentiment that OPEC and its allies, including Russia, will probably agree to continue with production cuts when they meet in Vienna on the 5th and 6th of December, a long await meeting from where investors hope oil will find some traction – Reuters was citing OPEC sources with that story. 

However, to the contrary, analysts at TD Securities argued that with "large surpluses in early 2020 still linger on the horizon, especially as OPEC+ appear hesitant to deepen output cuts when they meet in December — we would not be surprised to see prices move back to the low $50s into 2020."

WTI levels

The price is up to the highest levels since late September, breaking the 57.80/90 resistance with 58.60/80 on the map, a confluence of the 61.8% Fibonacci level of the Sep 19 highs and October lows and the late July highs. 60.80 is a confluence of the 78.6% Fibo and July highs. 55 the figure, as trend line support, guards a run back to the 23.6% Fibo of the same range located around 53.90 and late Oct lows a fraction below there.