WTI OIL – weak tone on surprise oil stocks rise; OPEC meeting in focus
WTI oil stands at the back foot on Wednesday but holding above previous day’s low at $57.41. Oil price remains under pressure on concerns whether major oil exporters will reach a deal about extending current output cut beyond March 2018.
Additional pressure came from unexpected rise in US crude stocks after API report on Tuesday showed build in crude inventories by 1.82 million barrels, compared to forecasted draw of 2.5 million barrels.
Focus turns towards EIA crude inventories report due later today and forecasted for 2.3 million barrels draw, compared to 1.8 million barrels draw last week.
Another surprise could push oil price below strong support at $57.41 (Fibo 38.2% of $54.80/$59.02 upleg, reinforced by rising 10SMA) which for now holds pullback from 2 ½ year high at $59.02.
Break of $57.41 would open daily Tenkan-se ($57.09) and $56.41 (Fibo 61.8% of $54.80/$59.02) in extension.
Outcome of OPEC meeting tomorrow would provide more clues about near-term direction.
Res: 57.80; 58.02; 59.02; 59.82
Sup: 57.41; 57.09; 56.91; 56.41