WTI down but within recent ranges ahead of key OPEC + meeting

• WTI has fallen back to $ 83.00 in recent trade, but remains within the approximate $ 81.00-$ 85.00 range of the past few weeks.
• OPEC + is expected not to deviate from plans to increase production at a rate of 400,000 bdp / month.
• Most analysts remain optimistic about the short-term outlook for oil with the global imbalance between supply and demand that will persist.

The price of the previous month’s futures contracts for the delivery of the US benchmark for sweet light crude oil, West Texas Intermediary (often referred to as WTI), has been down in recent trading as traders refrain from making big bets ahead of this week’s OPEC + meeting. Ahead of Thursday’s meeting, where the group is expected not to deviate from its current plan to increase production at a rate of 400,000 barrels per day each month, most traders are likely to keep their gunpowder dry, which it means that WTI could continue to oscillate within recent ranges, as has been the case since the start of the week. Currently, first month futures are trading at $ 83.50 per barrel, about $ 1.50 below Monday’s high of just under $ 84.00. But that leaves prices within the $ 81.00-85.00 range of the last few weeks.

In terms of macro updates relevant to oil; There haven’t been many notable developments lately. There have been some conversations about the struggles that some OPEC + members (mainly in Africa) have been having to raise production as the cartel’s production restrictions have eased in recent months, resulting in excess of added cartel compliance to its own It imposed restrictions on OPEC + production. This adds to the idea that OPEC + is not increasing production fast enough to match the spike in global oil demand, which according to some big US and European oil companies that reported profits this week has now returned to pre-pandemic levels. , has been key. factor that underpins the increase of more than 20% in oil prices since the beginning of September. The return of global oil demand to pre-pandemic levels has occurred faster than many analysts anticipated at the time because the rise in global natural gas prices has encouraged energy companies to switch to using derivatives relatively more. cheap crude oil as an energy source.

Given the above, most analysts remain optimistic about the short-term outlook for WTI. If OPEC + meets expectations and some post-event profit taking is observed, look for support at the $ 81.00 area, where some recent lows and the 21-day moving average reside. Buyers on dips may see a pullback here can be an attractive opportunity for dip buyers, which could set the stage for a pullback towards yearly highs around $ 85.00 or even higher.