Crude Oil Prices Steady Ahead of US Inventories Report, OPEC Meetings

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Written By: Angeline Feliciano
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  • Crude oil prices were steady in yesterday's trading amid the lack of US reports and updates from OPEC. Toady's inventories report could dictate direction.

Crude oil prices finished yesterday’s trading slightly higher ahead of today’s US crude oil inventories report. WTI crude opened at $55.87 and dropped to an intraday low of $55.28. Then during the European session, crude oil prices staged a rally to finish the day at $56.21.

No Phase One Trade Deal Anytime Soon?

Initially, the commodity slid on risk aversion. US President Donald Trump announced yesterday that he is not in a hurry to strike a phase one deal with China. People close to negotiations say that the president is critical of details being discussed as he feels that the US might get the losing end of the deal. This raised concerns that the US may increase tariffs on Chinese goods on the deadline initially set on December 15.

Crude Oil Inventories Expected to Show a Shortage

For today, crude oil prices will likely be dictated by data from the US. The Energy Information Administration (EIA) is anticipated to report that there is a shortage in oil barrels in the US at 3:30 pm GMT. The market consensus is for a deficit of 1.6 million barrels in the week ending on November 29.

ISM Non-Manufacturing PMI on Tap

Prior to that report, the ISM non-manufacturing PMI will be released at 3:00 pm GMT. The forecast is at 54.5. Readings above the 50.0 baseline figure mean that the services industry is expanding. A better-than-expected reading could be bullish for the US dollar as it would affirm the Federal Reserve’s optimism on the economy.

OPEC to Announce Further Production Cuts?

It’s also important to note that the Organization of Petroleum Exporting Countries (OPEC) is having meetings this week. Market participants are widely expecting the organization to announce further rate cuts. The current agreement is for member nations as a whole to cut production by 1.2 million barrels per day. There are speculations that OPEC may announce further production cuts by 300,000 barrels per day. If this turns out to be true, we could see crude oil prices track higher in reaction to lower supply.

Crude Oil Price Outlook

On the 4-hour chart, we can see that crude oil prices have fallen below the rising trend line (from connecting the lows of October 3, October 9, October 31, and November 20). In fact, the commodity now looks like any upward movement is limited by the previous trend line. A close below yesterday’s low could mean that crude oil prices may soon drop to $53.62 where the commodity bottomed on October 31. On the other hand, a bullish close above $56.72 may mean that crude oil prices could soon retest their monthly highs at $58.59.Download our latest quarterly market outlook for our longer-term trade ideas.

Written By: Angeline Feliciano

Angeline Feliciano has been trading Forex for over ten years. She has invaluable experience working in FX education companies like BabyPips.com and Learn to Trade as a trader, currency analyst, trading coach, and presenter. Aside from these roles, she has also created intensive educational content on fundamental analysis which is heavily sought after by retail traders. She has taught hundreds of people how to trade the FX market in the Philippines and in Australia. When she is not trading, you can find her in the gym lifting weights.

Published by
Written By: Angeline Feliciano