WTI rallies to the $42.00 area on risk appetite, OPEC+

Prices of the WTI re-test the $42.00 mark on Monday.
Traders expect the OPEC+ to keep the oil production cuts unchanged.
Weekly reports on crude oil supplies by the API, EIA come up later in the week.

Pablo Piovano FXStreet

Prices of the barrel of the West Texas Intermediate manage to reverse the recent downside and re-visit the $42.00 area on Monday.

WTI up on OPEC+ rumours, data

Following three consecutive daily pullbacks, prices of the barrel of the American benchmark for the sweet light crude oil trade on new 2-day highs near the $42.00 level on the back of rising hopes that the OPEC+ would keep the current oil output cuts unchanged.

In addition, positive news from the Japanese GDP figures (released earlier on Monday) and auspicious data from Chinese refining activity during October also lend oxygen to the strong rebound in crude oil prices.

On another front, the unremitting advance of the coronavirus pandemic and the impact on the economic activity coupled with the resumption of the production/exports in Libya are predicted to keep limiting the upside potential in prices for the time being. However, these concerns are susceptible to be tamed by rising hopes of an effective vaccine in the not-so-distant future.

Later in the week, the usual reports on US crude oil inventories by the API and the EIA are due on Tuesday and Wednesday, respectively.

WTI significant levels

At the moment the barrel of WTI is up 4.67% at $41.99 and faces the next hurdle at $43.04 (monthly high Nov.10) followed by $43.75 (monthly high Aug.26) and finally $48.64 (monthly high Mar.3). On the downside, a breach of $39.52 (55-day SMA) would expose $37.09 (low Nov.6) and then $36.46 (200-day SMA).

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Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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