Oil soars as OPEC+ meeting faces impasse
- WTI Oil soars as the OPEC+ meeting started online around 10:30 GMT.
- The US Dollar is roaring back after a few days of substantial weakness.
- Oil to rally ahead of the official OPEC+ outcome as impasse remains.
Oil prices are jumping higher for a second day in a row ahead of the OPEC+ meeting and outcome. With the OPEC+ meeting taking place at the time of writing, no official report has been issued and no consensus seems to be on the table when it comes down to distributing production cuts amongst all OPEC+ members. The African producing nations appear to be very reluctant to take any cuts, despite the recent downturn in Crude prices in global markets.
The US Dollar (USD) meanwhile is trying to set the record straight as markets might have devalued the Greenback a touch too much. While focussing on the end of the hiking cycle for the US Federal Reserve, markets got caught by surprise of a sudden substantial decline in the Eurozone in both its growth and inflation. At this pace, the Eurozone might even fall back into deflation by next year, which means quicker cuts, and thus again a widening rate differential which in its turn would favour a stronger US Dollar.
Oil news and market movers: OPEC+ developing story
The OPEC+ meeting started around 10:30 GMT. . Both Nigeria and Angola approved a production cut in June, but are now backtracking on that promise.
Recent numbers reveal that the opposing countries, Nigeria and Angola, are not meeting their maximum production quotas.
All eyes of course will be on whether Saudi Arabia will succeed in passing on production cuts to all members, in order to create a substantial floor in Oil prices.
Despite the surprise builds or less-than-expected draw downs from the US stockpile numbers measured by the American Petroleum Institute (API) and US Energy Information Administration (EIA), Oil prices keep soaring as the OPEC+ meeting is the leading story.
Oil Technical Analysis: Volatile day ahead
Oil prices will have a very eventful day as headlines emerge throughout the day on either a deal or no-deal on production quotas for all OPEC+ members. Commodity Traders will have their work cut out. Although an outcome is hard to predict, some deal will certainly get done as the current lacklustre demand side is likely to be countered by some production cuts, borne by at least sum or most OPEC+ members in order to create price stability.
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.