WTI edges lower ahead of OPEC+ panel meeting/EIA report, trades above $88.00
- WTI Crude Oil prices manage to hold above a three-week low touched the previous day.
- A bullish USD and fuel demand worries turn out to be key factors exerting some pressure.
- Traders look to the OPEC+ meeting and the EIA report on US inventory for a fresh impetus.
West Texas Intermediary (WTI) Crude Oil prices struggle to capitalize on the overnight bounce from a three-week low – levels just below the $87.00/barrel mark and edges lower during the Asian session on Wednesday. The commodity currently trades around the $88.15-$88.10 area, down over 0.35% for the day, though the downside seems cushioned ahead of the OPEC+ panel meeting later today.
Ministers from the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, are unlikely to tweak its current oil output policy in the wake of tightening global crude supply and rising demand. The market focus, meanwhile, will be an expected update on plans by Saudi Arabia and Russia for their voluntary cuts. In fact, the world's two largest Oil producers announced in September that they would extend the voluntary cuts amounting to 1.3 million barrels per day to the end of the year and said they would review the cut decisions monthly.
Apart from this, traders will take cues from the official Energy Information Administration (EIA) report on US stockpiles. The weekly inventory data published by the American Petroleum Institute (API) on Tuesday showed that US Crude Oil stockpiles possibly fell as much as 4.0 million barrels last week. The consensus estimates, meanwhile, suggest a drawdown of 0.092 million barrels as compared to a fall of 2.17 million barrels in the previous week. Nevertheless, the data might infuse some volatility and produce some trading opportunities around Crude Oil prices.
In the meantime, the underlying bullish sentiment surrounding the US Dollar (USD), bolstered by firming expectations for further policy tightening by the Federal Reserve (Fed), could act as a headwind for the USD-denominated commodity. This, along with worries that economic headwinds stemming from rapidly rising borrowing costs could dent fuel demand, might contribute to keeping a lid on any meaningful upside for Crude Oil prices.
Technical levels to watch