WTI regains $68.00 ahead of OPEC meeting, Omicron, PMIs in focus

WTI keeps bounce off late August lows, consolidating the biggest monthly fall since March 2020.
OPEC holds delayed meeting on Wednesday, OPEC+ eyed for Thursday amid talks over demand-supply matrix.
Market sentiment improves as fears over South African covid variant eases, China sounds cautiously optimistic.
OPEC+ supply increase in January will be crucial, US ISM Manufacturing PMI, ADP Employment Change eyed too.

Anil Panchal FXStreet

WTI bulls battle $68.00, up 2.70% intraday following the drop to a three-month low. With this, the black gold licks its wounds after posting the biggest monthly fall in 21 months.

While mildly upbeat market sentiment seems to underpin the commodity’s gains, bulls await the two-day Organization of the Petroleum Exporting Countries (OPEC) meeting, starting from 13:00 GMT on Wednesday, for fresh impulse. It’s worth noting that OPEC+, which groups OPEC with allies including Russia, will meet on Thursday for a final verdict on the oil supply by the global producers.

Hawkish comments from China’s Vice Premier Liu He and expectations from the US and Japan to offer more stimulus seem to favor the market sentiment of late. Adding to the bullish bias are the recently easing virus cases in South Africa and an absence of data to claim the earlier fears of Omicron.

On the other hand, Fed Chair Jerome Powell trigged a bounce in the US Treasury yields from a two-month low by suggesting extended inflation fears and discussion over faster taper in the December meeting. Although the US 10-year Treasury yields remain firmer around 1.47%, the US Dollar Index (DXY) remains indecisive around 95.90 as stock futures and Asia-Pacific shares improve of late.

Looking forward, OPEC chatters will be the key as global oil producers are pushed for more supply increase than the earlier plans of adding 400,000 barrels per day of output starting from January. However, the latest virus-led activity restrictions and the resulted weakness in oil prices have questioned the demand outlook, allowing the cartel to ignore the US-led demands.

Elsewhere, the final readings of the Markit PMIs for November will precede the US ISM Manufacturing PMI and US ADP Employment Change for clear direction. Additionally important is the second day of testimony from Fed Chair Jerome Powell.

Technical analysis

Although an ascending support line from March 2021 restricts the immediate downside of WTI near $64.50, the commodity’s gains are likely challenged by the yearly support-turned-resistance trend line near $71.20.

Additional important levels

Overview
Today last price	68.18
Today Daily Change	1.87
Today Daily Change %	2.82%
Today daily open	66.31

Trends
Daily SMA20	77.44
Daily SMA50	78.57
Daily SMA100	73.85
Daily SMA200	69.81

Levels
Previous Daily High	71.05
Previous Daily Low	64.32
Previous Weekly High	79.02
Previous Weekly Low	67.31
Previous Monthly High	83.97
Previous Monthly Low	64.32
Daily Fibonacci 38.2%	66.89
Daily Fibonacci 61.8%	68.48
Daily Pivot Point S1	63.4
Daily Pivot Point S2	60.49
Daily Pivot Point S3	56.67
Daily Pivot Point R1	70.13
Daily Pivot Point R2	73.96
Daily Pivot Point R3	76.86

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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