Note

WTI faces rejection at key hurdle despite decline in US inventories

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  • WTI surrenders gains after facing rejection at key trendline hurdle. 
  • Fears that OPEC+ may ease output cuts look to be capping the upside. 

West Texas Intermediate (WTI) oil is currently trading largely unchanged on the day at $40.50 per barrel, having failed to take out resistance at $40.86 early Tuesday. That level is housing the trendline connecting June 23 and June 8 highs. 

The black gold rose nearly 0.5% on Tuesday, as US crude inventories fell by 8.3 million barrels in the week to July 10, beating analysts’ expectations for a decline of 2.1 million barrels. However, the recovery from $39 ran out of the steam at the trendline hurdle early Tuesday, possibly due to fears that the OPEC+, a group of major producers led by Saudi Arabia and Russia, may decide to raise output on Wednesday. 

Key members of OPEC and allies including Russia, a group known as OPEC+, are set to decide whether to extend output cuts of 9.7 million barrels per day (bpd) that end in July or ease them to 7.7 million bpd, according to Reuters. A taper cannot be ruled out, as oil prices have quadrupled since hitting lows below $10 in April. 

“OPEC+ decision on production cut tapering will set the tone for the oil market,” ANZ Research said in a note, according to Reuters. 

A bigger-than-expected taper will likely yield a notable price pullback, more so, as the resurgence of coronavirus in the US is derailing reopening plans. 

Technical levels

WTI

Overview
Today last price 40.55
Today Daily Change 0.09
Today Daily Change % 0.00
Today daily open 40.55
Trends
Daily SMA20 39.78
Daily SMA50 35.85
Daily SMA100 32.53
Daily SMA200 44.45
Levels
Previous Daily High 40.77
Previous Daily Low 39.3
Previous Weekly High 41.14
Previous Weekly Low 38.73
Previous Monthly High 41.65
Previous Monthly Low 34.45
Daily Fibonacci 38.2% 40.21
Daily Fibonacci 61.8% 39.86
Daily Pivot Point S1 39.72
Daily Pivot Point S2 38.77
Daily Pivot Point S3 38.25
Daily Pivot Point R1 41.19
Daily Pivot Point R2 41.71
Daily Pivot Point R3 42.66

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Its too risky to open a position now
Hopefully a positive OPEC meeting this week, unlike the one in March

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