- Oil gives up earlier attempts to avoid losses and falls to session's low.
- OPEC+ will convene online to decide on production cuts, with most analysts expecting current cuts to extend into 2025.
- The US Dollar Index trades further below 105.00 to the mid 104.50-levels.
Oil prices were trying to claw back though are back to session's low with US equities rolling over. The minutes after the US Personal Consumption Expenditures (PCE) release were hopeful though with a retreating Greenback, equities higher and Oil getting some room to recover. Just an hour into the US trading session, Oil prices are back to session's low and are pushing this weekly performance in a loss.
Meanwhile, the US Dollar Index (DXY) has had a volatile week and is trading just below 105.00. The Greenback roared on Wednesday, when bond traders pushed yields higher across the board during some chunky US sovereign debt bond auctions by demanding a higher yield for the offered debt issuances. However, the move got erased on Thursday with both softer US housing data and the Gross Domestic Product data release. On Friday, the US Personal Consumption Expenditure (PCE) Price Index report pushed the Greenback to the downside with a rather disinflationary print.
At the time of writing, Crude Oil (WTI) trades at $77.35 and Brent Crude at $81.60
Oil news and market movers: All eyes on OPEC now
- OPEC+ meeting on Sunday will be an online meeting. Here are some key takeaways ahead of the meeting:
- Iran, Libya and Venezuela are exempt from production cuts because their output is constrained by external factors such as sanctions or war.
- Both Bloomberg and Reuters have reported plans to keep production cuts in place heading into 2025, according to sources close to the matter.
- United Arab Emirates and Kazakhstan are set to jack up their production in the near future with new installations and production sites set to come online.
- Traders keep pointing to the uncertain US economic outlook with an unclear monetary policy ahead, while the US housing market is showing signs of a cooldown.
- This Friday closes off with the weekly Baker Hughes Oil Rig Count data at 17:00 GMT. The previous number was a count of 497.
Oil Technical Analysis: A lost summer for Crude prices
Oil prices are showing again their sensitive side, while traders clearly see no confirmation of a pickup in demand on the horizon soon. The Fed has been clearly saying these past two weeks that chances of an initial rate cut for 2024 starts to look bleak. Not much OPEC+ can do against that, and prolonging production cuts into 2025 couldn’t be enough to order the deficit between current supply levels and the sluggish demand outlook.
First, the Simple Moving Averages (SMA) need to be regained under control. The 100-day SMA at $79.05 and the 200-day SMA at $79.56 are the first levels on the upside. Next, the 55-day Simple Moving Average (SMA) at $81.22 and the descending trendline at $81.75 are an area with a lot of resistance where any recovery rally could pause. Once broken through there, the road looks quite open to head to $87.12.
On the downside, the $76.00 marker is coming back into focus with the $75.27 level playing a crucial role if traders still want to have an option to head back to $80.00. Should that $75.27 pivotal level snap, expect to see a risk-full nosedive move that could sprint all the way down to $68, below $70.00.
US WTI Crude Oil: Daily Chart
