WTI consolidates in a range below $78.00 ahead of OPEC+ meeting, US PCE data

West Texas Intermediate (WTI) Crude Oil prices struggle to capitalize on the weekly gains registered over the past two days and oscillate in a narrow band during the Asian session on Thursday. The commodity currently trades around the $77.75-$77.80 region, nearly unchanged for the day and just below a one-week high touched on Wednesday, as traders remain on the sidelines ahead of the OPEC+ meeting later today.

Heading into the key event risk, hopes of some form of a price-supportive resolution and deeper supply cuts from the cartel turn out to be a key factor lending support to the black liquid. Two OPEC+ sources said the group was discussing a deeper collective supply cut and media reports suggest that the cut could be of as much as 1 million barrels a day. That said, one of the sources said that OPEC+ may not be able to agree on this and it was possible the meeting could roll over existing policy. This, along with a jump in US crude stockpiles and dismal Chinese data, keeps a lid on any meaningful upside for Oil prices.

Data from the US Energy Information Administration (EIA) released on Wednesday, revealed an inventory build of 1.6 million barrels, reaching 449.7 million in the week to November 17. This missed consensus estimates for a 933,000-barrel drop by a big margin and pointed to weak demand. The impact, however, was neutralised by large draws in other refined products, like residual fuel oil. Meanwhile, official data released from China showed that manufacturing activity contracted for a second straight month in November, fuelling concerns about slowing economic growth in the world's largest oil importer.

The aforementioned mixed fundamental backdrop is holding back traders from placing aggressive directional bets around Oil prices. Market participants also prefer to wait on the sidelines ahead of the release of the US PCE Price Index later during the North American session. The core gauge is the Fed's preferred benchmark for measuring longer-term inflation trends and should influence the next policy move. This, in turn, will drive the US Dollar (USD) and provide some impetus to Oil prices.

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