Crude oil’s quiet session today suggests the street is in wait and see mode for tomorrow’s OPEC meeting.
Oil has settled into wait and see mode overnight with both contracts finishing ever so slightly low from the previous day. Brent closed down 50 cents at 63.10 and WTI fell a minuscule 10 cents to 57.57, shrugging off a higher than anticipated climb in crude stocks from the American Petroleum Institute’s inventory data.
Brent suffered some intra-day wobbles ahead of tomorrow’s crucial OPEC/Non-OPEC official meeting in Vienna. Although the market has priced an extension of the production cut until the end of March 2018, rumours continue to circulate that Russia may not be entirely on board or may request a review in June. Either outcome is likely to provoke some heavy selling of crude if cracks appear driven by the world’s largest producer.
Brent crude was sleepless in Singapore this morning, almost unchanged at 63.20. Initial support is nearby at 62.90 followed by 62.00 and then the all-import multiday low at 61.25. Brent quietly dropped through its short-term trend line on Monday, and this now intersects with the double top today at 64.45. Above there is the second double top at 64.85.
WTI was also unchanged with support at 57.25 and then 56.75, its two-month trendline support. A break of this level opens up a potentially ugly drop to a series of daily lows at 55.00. Resistance is at 58.00 and then the November high at 57.90.
With so much complacency about a rollover priced into tomorrow’s meeting, the balance of probabilities suggests that oil is more vulnerable at the moment to any disappointments from the OPEC summit.