WTI retreats from monthly highs near $ 41.50 before OPEC + meeting

• WTI returns an initial move at $ 41.45, still near monthly highs.
• US oil is virtually unchanged on the day amid below-expectations China’s GDP and bullish equity markets.
• OPEC + will discuss the weakening outlook for oil demand.

He WTI (NYMEX futures) back from monthly highs near $ 41.47 and remains virtually unchanged on the day, just below the $ 41.00 level, while investors withdraw profits ahead of the meeting of OPEC and its allies (OPEC +) scheduled for later on Monday.

The pullback from the multi-week highs can be attributed primarily to the China’s third quarter GDP disappointment. The Chinese economy expanded less than expected in the third quarter, underscoring the oil demand concerns from the world’s second largest consumer.

Despite the pullback, sentiment around higher yielding oil remains backed by market optimism, as markets remain hopeful for possible US fiscal stimulus and new coronavirus vaccines.

Furthermore, the rebound in Risk appetite in global markets weighs on the US dollar safe-haven, which in turn benefits dollar-sensitive crude prices. A weaker dollar makes dollar-denominated oil cheaper for foreign buyers.

Also, supporting the bullish case on WTI’s barrel, OPEC + will meet today to discuss the weakening outlook for oil demand, given the resurgence of the coronavirus on both sides of the Atlantic. OPEC +, which includes major OPEC producers Saudi Arabia and Russia, is also likely to talk about rising Libyan oil production.

Although OPEC + is unlikely to recommend immediate action to address the prospect of declining demand, Any measures or comments to support prices could offer new enthusiasm to the WTI bulls.

WTI technical levels

“Above recent highs, the Sept. 4 high near $ 42.10 is the key to the further rise in WTI prices towards the end of August lows around $ 43.50. On the other hand, a breakdown of the immediate support line, at $ 40.78 now, may cause sellers to attack the $ 39.70-60 support zone comprising the 200-period SMA and triangle support. ” explains FXStreet analyst Anil Panchal.