WTI consolidates the bounce around $66 ahead of key OPEC+ decision
- WTI rebounds, snapping two-day downtrend ahead of OPEC+ meet.
- 200-DMA at $69.83 is the level to beat on the road to recovery.
- Oversold RSI conditions caution bears but OPEC+ outcome holds the key.
WTI (NYMEX futures) is looking to find its feet in the Asian trades this Thursday, trying another recovery attempt from three-month lows of $64.31.
In doing so, the US oil is posting modest gains on the day, trading at $65.72, having faced rejection just below the $67 mark.
The market mood remains mixed amid the recent hawkish comments from Fed Chair Jerome Powell while he presents a cautious tone on persistent inflationary pressures. Growing uncertainty over the Omicron covid variant also keeps the investors away from higher-yielding currencies such as oil.
However, oil markets may be looking to reposition ahead of the critical OPEC and its allies (OPEC+) meeting, in which the alliance could pause the planned oil output increase.
Meanwhile, US Deputy Energy Secretary David Turk said on Wednesday that the timing of the strategic crude oil stockpile release could be adjusted if prices drop, per Reuters.
Looking ahead, the OPEC+ decision will be crucial for the next direction in oil. In the meantime, the broader market sentiment will continue to play its part in a potential oil-price recovery.
WTI: Technical outlook
Oversold Relative Strength Index (RSI) conditions on the daily chart suggest that a rebound could likely extend towards the 200-Daily Moving Average (DMA) at $69.83.
Ahead of that, strong offers near the $68 barrier need to be cleared on a sustained basis.
If sellers return at higher levels, then WTI could retest multi-month troughs on the $64 level, below which the additional downside will open up towards the horizontal trendline support at $62.32.
That level will be the line in the sand for WTI optimists.
WTI: Daily chart
WTI: Additional levels to watch
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
