Crude Oil Continues to Seep Lower Before OPEC

Both Brent and WTI crude continue to drift lower ahead of Thursday’s OPEC/Non-OPEC meeting in Vienna.

The divergence in price behaviour between Brent and WTI continued overnight. Although both contracts fell, WTI had much the worse of it, falling 1.90% to 57.65 as the overbought technical indicators and the imminent reopening of the Keystone pipeline from Canada weighed on it. By contrast, Brent fell a meagre 0.40% to 63.65, staging a late comeback having almost touched 63.00 earlier in the session on rumours of Russian jitters about extending the OPEC/Non-OPEC production cut. Ahead of Thursday’s meeting, we expect position squaring to weigh on both crude contracts.

With no API Crude Inventory figures this evening, the short-term market will be operating in a data vacuum with Wednesday’s official crude inventories likely subsumed ahead of the Thursday summit. Oil trading will therefore probably be choppy intraday as short-term traders chase their tails on rumours and innuendo.

Brent crude is unchanged in early Asian trading with intra-day resistance at 63.95 ahead of the formidable twin double tops at 64.40 and 64.85. Support is at 63.00 and 62.25 ahead of the critical multiple daily lows at 61.25.

Brent Daily

WTI has drifted ten cents lower to 57.55 as traders continue to lighten long positions. Support is initially at the overnight lows of 57.35 followed by 56.75 and then the two-month trendline support close behind at 56.55. A break of this level sets the scene for a much broader correction to 55.00. WTI formed a  double top at 56.85 overnight which becomes strong resistance.

WTI Daily

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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Jeffrey Halley

Senior Currency Analyst

Based in Singapore, Jeffrey has over 25 years experience in the financial markets, having traded currencies, options, precious metals and futures. Jeffrey started his career at Barclays Bank in New Zealand. However he has spent most of it in London and Asia.Jeffrey focuses on the Asia time zone across asset classes. A regular commentator on business news TV and Radio, he is originally from New Zealand and holds an MBA from Cass Business School, London.

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