WTI off multi-day tops, still holds $ 58 ahead of OPEC+ meet
- Oil buoyed by trade hopes and falling US stockpiles.
- Hopes of deeper OPEC+ output cuts keep the bulls alive.
- All eyes on the OPEC+ meeting outcome and trade headlines.
WTI (oil futures on NYMEX) sees a minor correction from five-day highs of 58.66 reached on Wednesday. However, the bulls manage to retain the 58 handle ahead of the key OPEC and its allies (OPEC+) meeting to discuss the supply cut policy.
Upbeat risk tone combined with increased expectations of deeper oil output cuts by the OPEC+ continue to keep the bullish momentum intact in the black gold. Nigerian Oil Minister said that he expects oil prices around $ 60 while the Iran OPEC Envoy said that Iran backs OPEC majority decision to cut oil production.
Further, Reuters quoted two sources last hour, as saying that OPEC+ were said to discuss deeper oil cuts of more than 400k bpd as the main scenario.
Meanwhile, the broader market sentiment remains buoyed by ongoing US-China trade optimism following Wednesday’s Bloomberg report, citing that the US and China are moving closer to a trade deal despite the escalating tensions over the Hong Kong and Xinjiang bills. Improved risk tone keeps the demand for the higher-yielding oil afloat.
The downside in prices also appears capped amid bullish US weekly supply reports. The American Petroleum Institute (API) data showed late Tuesday that the US crude inventories fell by 3.7 million barrels while the Energy Information Administration (EIA) data showed that the US crude stockpiles decreased by 4.9 million barrels last week.
Looking ahead, the next direction in the barrel of WTI will be determined by the outcome of OPEC+ on the supply cut policy. The two-day OPEC+ Vienna meeting begins on Thursday.
WTI Levels to watch