|

WTI edges lower toward $56 handle, down more than 1% on the day

  • Crude oil prices start the week on a negative note.
  • Investors may be looking to take profits before next week's OPEC meeting.

Crude oil prices are pushing lower on Monday, with the barrel of West Texas Intermediate losing more than 1%, or 60 cents, on the day. At the moment, the barrel of WTI is trading at $56.16, a tad above its daily low of $55.98.

Vienna meeting in the limelight

OPEC members are set to meet in Vienna on November 30 to discuss a possible extension of the output cut deal, which will expire at the end of March, until the end of 2018. Commenting on a potential outcome of that meeting, "it is widely believed that OPEC together with 10 non-OPEC countries will roll-over their production for the whole of 2018 although Russia is holding its cards close to its chest," PVM Oil Associates strategist Tamas Varga told Reuters.

Following the rally witnessed during the first half of this month, the barrel of WTI went into a consolidation phase and retraced a portion of its recent gains. Increasing shale oil prıduction output and higher-than-expected inventory buildup in the U.S. kept the market participants on edge. Nonetheless, buyers continued to defend the $55 handle, which became a critical short-term support for the barrel of WTI. A break below this level seems unlikely unless investors find a reason to suspect that the output cut agreement won't be extended.

Technical levels to consider

With a decisive break through $55 (psychological level/Nov. 15/16 low), the barrel of WTI could extend its losses towards $54.40 (Nov. 3 low) and $53.75 (Oct. 30 low). On the upside, resistances align at $56.80 (daily high), $57.35 (Nov. 10 high) and $58 (psychological level/Nov. 8 high).

Author

Eren Sengezer

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

More from Eren Sengezer
Share:

Editor's Picks

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading 

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.