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In the past few weeks, oil prices have been under intense selling pressure as investors worry about robust supplies and an uncertain demand outlook. The EIA crude Oil inventories released last week also showed another buildup last week which was larger than expected. However, crude prices rebounded on Friday as demand for the oil prices bounced back on expectations OPEC will further cut output.
The recovery continues this week as well, both U.S. West Texas Intermediate (WTI) and Brent crude futures extend the gains on Monday ahead of a highly anticipated meeting of OPEC-producing countries. Ministers from OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, meet in Vienna on November 26. They have already agreed to reduce oil production by 3.66 million barrels per day next year but may consider further cuts due to the decline in oil prices.
"It is not pleasant to see that market volatility is greater ahead of the next meeting while fundamentals overall remain solid," one of the OPEC+ sources said.
US WTI short-term technical outlook
On the daily chart, we see that WTI has successfully bounced back from the 4-month lows. The next two weeks are going to be pivotal ones for WTI. If prices settle above $78 per barrel, we may witness an extended recovery to $80 minimum. If it breaks and closes above $80 then will see a further bullish move to $82.30 and $84. On the flip side, if the WTI consolidates its recent gains by declining, support could be provided by the $75.40 and $74.90 marks.
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