WTI/USD – US Crude Oil Rallies on Hope for OPEC Deal

US crude prices have climbed higher on Monday, continuing the gains which marked the Friday session. In North American trade, WTI/USD futures are trading at $47.94. Brent crude futures are trading at $48.45, as the Brent premium stands at $0.51. On the release front, it’s a very quiet start to the week, with no US events on the schedule.

Oil prices continue to rebound, as US crude has jumped 3.5 percent since Friday. The surge is in response to renewed optimism that OPEC will reach a deal on a production cap. The cartel members meet in Vienna on November 30. However, previous meetings have failed to result in a cap agreement, due to internal squabbling among members. Will this time be any different? We won’t know until the meeting takes place, meaning that traders can expect volatility in oil prices ahead of next week’s summit.

Oil Surges on OPEC Production Agreement Hopes

US key indicators were generally strong on Thursday, pointing to a strong economy. Unemployment Claims sparkled at 235 thousand, much lower than the estimate of 257 thousand. This marked the lowest weekly claims total since 1973. CPI matched expectations at 0.4%, but Core CPI came in at 0.1% shy of the estimate of 0.2%.  The Philly Fed Manufacturing Index dropped to 7.6 points, short of the forecast. On the housing front, Housing Starts remained unchanged at 1.23 million, above expectations.

The US dollar was broadly higher on Thursday, following Fed Chair Yellen’s appearance before a congressional committee. Yellen did not explicitly acknowledge that the Fed would raise rates at the December 13-14 policy meeting, but she did say that the rate hike would be “relatively soon”. Yellen make no mention of Donald Trump’s potential policies, which could include greater fiscal spending, as she reiterated that future rate hikes should be “gradual”. The odds of a rate hike next month currently stand at 95 percent. Commenting on Yellen’s testimony, Jonathan Wright, a former Fed economist, summed up market sentiment –  “a rate hike in December is a done deal, barring a significant surprise in the next jobs numbers or in financial markets”.

WTI/USD Fundamentals

Monday (November 21)

• There are no US releases on the schedule

WTI/USD for Monday, November 21, 2016

WTI/USD November 21 at 11:10 EST

Open: 46.87 High: 47.95 Low: 46.68 Close: 47.94

WTI USD Technical

• WTI/USD showed limited movement in the Asian and European sessions. The pair has posted strong gains in North American trade
• 46.54 is providing support
• There is resistance at 52.22

Further levels in both directions:

• Below: 46.54, 40.57, 33.22 and 28.71
• Above: 52.22, 58.32 and 65.05

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