Oil soars for a second day as rumours build up towards OPEC+ meeting

• WTI Oil soars higher as consensus is near within OPEC on production quotas.
• The US Dollar is trying to turn around recent declines after it hit a fresh three-month low. 
• Oil to rally further ahead of OPEC+ on Thursday when more details will leak on production cuts. 

Oil prices are off the lows and are soaring above $76 on Wednesday. Rumours were the main driver already this week around the upcoming OPEC+ meeting on Thursday. The big issue at hand was that African countries were vetoing any production cuts they needed to make after Saudi Arabia asked  all OPEC+ members to make efforts to ease the supply side. Rumours overnight have leaked that a deal is near and no delay will be taking place, with OPEC+ ready to provide a package of production cuts by several members. 

The US Dollar (USD) fell out of bed on Tuesday and saw its descent eke out more losses. The catalyst which triggered the latest leg lower was Fed member Christopher Waller, who surprised markets with a very dovish tilt. US Yields dropped, and ticked the next domino in a spillover effect, which saw a devaluing US Dollar and a US Dollar Index (DXY) printing a fresh 3-month low. 

Crude Oil (WTI) trades at $76.88 per barrel and Brent Oil trades at $81.83 per barrel at the time of writing. 

Oil news and market movers: OPEC+ deal very near

• Sources revealed that an OPEC+ agreement is very near and that the African countries are close to agreeing the offer on the table. Saudi Arabia has demanded from all OPEC+ members to cut its production in order to create a substantial floor in current Oil prices and to provide a reply to the current decline in demand.
• Saudi Aramco is forecasted to cut prices for Oil deliveries to Asia for the first time since June as cheaper US Oil and lagging European demand drives up competition with lower prices in the region.
• The overnight numbers from the American Petroleum Institute on US stockpiles, revealed a small draw down of 817,000, coming from a previous build of 9.047 million last week. A bigger draw down of 2 million was expected.
• This Wednesday near 15:30 GMT the Energy Information Administration (EIA) is expected to reveal a draw down of 933,000 barrels. Last week a massive build up of 8,701 million was at hand. 

Oil Technical Analysis: OPEC+ deal make or break

Oil prices may have reached the end of the line in their downtrend for now. Prices are starting to advance again on rumours that a joint OPEC+ supply cut package is on the table and close to being adopted by each party. Expect to see more upturn on the back of this, though the length and strength will depend on the impact and broadness of the proposed package. 

On the upside, $80.00 is the resistance to watch out for. Should crude be able to jump above that again, look for $84.00 (purple line) as the next level to see some selling pressure or profit taking. Should Oil prices be able to consolidate above there, the topside for this fall near $93.00 could come back into play.

On the downside, traders are seeing a soft floor forming near $74.00. This level is acting as the last line of defence before entering $70.00 and lower. Watch out for $67.00 with that triple bottom from June as the next support level to trade at. 

US WTI Crude Oil: Daily Chart