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Fundamentals

During the Asian session on Wednesday (November 29), WTI crude oil fluctuated in a narrow range and is currently trading around 76.5 dollars per barrel. Oil prices were still affected by information yesterday and fluctuated in a wide range, just like the market the day before yesterday. A piece of news in the market ignited bearish sentiment. OPEC+ negotiations on oil policy in 2024 are difficult, which makes it possible to reverse the previous agreement rather than deeper production cuts, according to Reuters, citing four OPEC+ sources. As a result, oil prices declined sharply, falling as low as around 74.7. Subsequently, API crude oil inventories reported a decrease of 81.7 and the US dollar rebounded sharply to a high of 77.1. We also highlighted yesterday that if oil prices cannot fall below 73.8, crude oil may have to rebound strongly. The upper side may be able to touch 77.1, and the oil price trend has basically fulfilled the judgment. The answer will also be revealed on Thursday. However, the market will be more sensitive to information in the 2 days before the meeting. There is the possibility of any extreme oscillations. As long as the results are not officially announced, anything is possible. As the market is destined to fluctuate, trying to buy low and sell high is a good choice for investors.

Data: The US FHFA home price index was 0.6% in September, slightly higher than the expected 0.5% and lower than the previous value of 0.7%. Conference Board Consumer Confidence Index was 102, compared with the previous value of 99.1 and the expected 101.  

Inventories: US API crude oil inventories fell by 817,000 barrels in the week ended November 24, compared with an increase of 9.05 million barrels in the previous week.  

Investors need to focus on the revised Q3 GDP data and EIA crude oil inventories data today and mainly pay attention to the relevant news and results of the OPEC+ meeting this week.

Technical Analysis

Oil prices continued to fluctuate and fall on the news yesterday, falling as low as 74.7 before rebounding quickly to 77.1. Finally, oil prices closed a bull candle, ending four consecutive bears, and there were signs of standing firm after the appearance of the Doji Star. On the daily structure, as oil prices are currently standing above the MA5 and MA10, the center gravity of the market is rising. The MACD indicator also keeps widening in the oversold area. Whether oil prices can finally enter the upward trend again depends on the support of fundamentals, that is, the results of this Thursday's meeting. The current oil price is around 76.5. According to the resilience and trend of the price, the market is generally correcting at a low level to consolidate the bottom foundation. The big cycle may be more bullish. Therefore, for oil prices, investors should start to be bullish and try to go long. At the same time, traders should pay attention to the resistance near 78.5 above and the support around 75.8 during the day. If the oil price pullback low does not break, the US market may be able to continue to rise. Aggressive traders can continue to trade in the 75.8-78.5 range with a focus on going short at low.

Trading Recommendations

Trading Direction: Long

Entry Price: 75.800

Target Price: 78.500

Stop Loss: 75.300

Support: 75.800/73.500

Resistance: 78.500/79.500