- Summary:
- Crude oil prices continue higher for the second day adding 0.48% at $56.22 per barrel recovering some of Friday’s steep losses. Oil prices supported
Crude oil prices continue higher for the second day adding 0.48% at $56.22 per barrel recovering some of Friday’s steep losses. Oil prices supported by speculation on further production cuts from OPEC in its upcoming meeting in Vienna. Stronger manufacturing PMI data from major economies show that the global economy might be bottoming out.
On the other hand, weakness in U.S. manufacturing after the data released yesterday, might have a negative impact on crude oil. The political tensions eased in Iran and that reduce the risks to oil disruption from one of the major oil-producing country.
Crude oil prices crashed on Friday after President Donald Trump signed the legislation that supports Hong Kong protesters. Last week, U.S. crude oil stocks increased by 1.6 million barrels as the oil production hit a record high at 12.9 million barrels per day while refinery runs decreased which further weighed on the prices.
OPEC Meeting Will Set The Tone
Speculation that OPEC+ producers might consider crude oil production cuts and extension of the deal after the March in their next meeting on December 5th in Vienna helps crude oil price.
Russia will join the meeting in Vienna, but said that prefers a wait and see approach before committing to any further extensions in oil production cuts as the country producing already above quota agreed with OPEC. Signs of discontent between the participating countries will put pressure on oil price.
Crude Oil Prices Holds Above the 100-Day Moving Average
The Crude oil price added 1.40% yesterday after the sharp decline on Friday which cancelled the bullish momentum started back in October, but managed to regain the 100 and 200-day moving average. The gains today enhance the rebound as the crude oil price holds above the 200 and 100-day moving average.
Now crude oil price faces the first resistance at $56.2 the daily high. If bulls clear that intraday level, the next resistance will be the 50-day moving average at $57.5. Crude oil price above that level will regain the positive momentum and will attempt to reach $58.26 the high from Friday’s session.
On the downside, first resistance for crude oil stands at $55.93 today’s low, while the next support determined at $55 the low from Friday’s volatile trading session. In case that the crude oil price breaks below that support zone the way for a test of 54.10, the low from November 1st will be open.
Crude oil investors will focus on the outcome of the OPEC meeting later this week that will provide fresh clues about the oil supply and how the member countries will implement the decisions. Crude prices might get a boost if OPEC agrees on deeper output cuts.