American light oil (symbol ‘USOIL’) has bounced from 16 November’s closing low to reach around $77.50 at the time of writing. Although traders remain preoccupied with the middling performance of China’s economy, some positivity comes from the potential for OPEC+ to announce further limits on production at its next meeting.
‘OPEC+’s upcoming meeting on Sunday 26 November is really important because it’ll show us how committed the group and its allies are to supporting prices,’ said Michael Stark at Exness. ‘Oil has definitely had a challenging quarter so far, but in the absence of significant new information on demand or possible disruptions to supply it’s difficult to see what pushes USOIL back below $70 in the immediate future at least.’
Unlike in early October, this bounce hasn’t featured a significant gap, and volatility has also been somewhat lower. The confluence of the recent low with the 78.6% weekly Fibonacci retracement seems to confirm this area as an important support.
However, the 61.8% Fibo hasn’t clearly been broken yet, so there might be a pause in the next few days if the price doesn’t continue upward to test $80. OPEC+’s meeting is critical here: in the runup to a major event like this, large participants typically bide their time, so a repeat of early October’s big movements seems unlikely before next week’s open.
‘OPEC+’s upcoming meeting on Sunday 26 November is really important because it’ll show us how committed the group and its allies are to supporting prices,’ said Michael Stark at Exness. ‘Oil has definitely had a challenging quarter so far, but in the absence of significant new information on demand or possible disruptions to supply it’s difficult to see what pushes USOIL back below $70 in the immediate future at least.’
Unlike in early October, this bounce hasn’t featured a significant gap, and volatility has also been somewhat lower. The confluence of the recent low with the 78.6% weekly Fibonacci retracement seems to confirm this area as an important support.
However, the 61.8% Fibo hasn’t clearly been broken yet, so there might be a pause in the next few days if the price doesn’t continue upward to test $80. OPEC+’s meeting is critical here: in the runup to a major event like this, large participants typically bide their time, so a repeat of early October’s big movements seems unlikely before next week’s open.