Oil in the green for this week as markets gear up for OPEC productions cuts

• WTI Oil traders brace for headline risk as OPEC ministers are due to meet this weekend.
• The US Dollar continues to weaken, supporting commodity prices. 
• Oil could recover to $84 should more and longer production cuts be announced at the next OPEC+ meeting. 

Oil prices have been jumping higher for two consecutive days in a row as market participants are gearing up for possible supply cuts at hand from OPEC+. Although the next meeting is due on November 26th, it looks like rumours are spreading in the markets that Saudi Arabia might prolong and broaden its production cut in volume and duration.  Oil refineries are caught in the middle with stock piles rising, triggering less demand, margins becoming thinner and supply wearing thin. 

Meanwhile, the US Dollar (USD) keeps printing a fresh two-month high and is at a crucial point in terms of price action in the US Dollar Index (DXY). The DXY price is crossing two very crucial technical moving averages which means that a more substantial downside could come. The Greenback could ease further, for example against the Euro (EUR/USD) to 1.1180, which would mean another 2.5% devaluation for the Greenback. 

Crude Oil (WTI) trades at $77.34 per barrel and Brent Oil trades at $81.85 per barrel at the time of writing. 

Oil news and market movers: Oil markets on the lookout for OPEC

• Russia has axed its seaborne Crude exports to the lowest since August of this year. The cut comes to counterweigh the recent uptick in October, ahead of an OPEC minister’s meeting this weekend. 
• RBC Capital Markets LLC issued a report warning that more and deeper production cuts could come at the next OPEC+ meeting on November 26th. Efforts this time would not come from Saudi Arabia alone, and would be a joint effort in order to share the burden, RBC’s analyst Helima Croft said. 
• Iranian Oil Minister Javad Owji said that Iran’s Oil production will rise to 3.6 million barrels by March next year and to 4m bbl/day in the year after.
• This Tuesday the American Petroleum Institute is due to release its weekly stockpile numbers. Previous data showed a build of 1.335 million barrels, no forecast foreseen for this week’s number. 

Oil Technical Analysis: OPEC to make a move 

Oil prices are set to move as market expectations are soaring for any kind of production cuts from OPEC. With the OPEC+ ministers meeting this weekend, markets will be on the lookout for any additional action that could cement a floor in crude prices, which at the moment is proving a challenge. The lingering Israeli-Palestinian situation remains an elephant in the room, certainly after the seizing of a tanker in the Strait of Hormuz by Iran-backed Houthi rebels.  

On the upside, $80.00 is the resistance to watch out for. Should crude be able to jump higher 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. Once in that area, markets might factor in the risk of a surprise intervention from OPEC+ to jack Oil prices back up again. 

US WTI Crude Oil: Daily Chart