WTI looks to OPEC meeting for clear direction, clings to familiar territories under $59.00

• WTI clings to one week high amid a lack of major catalyst ahead of the key event.
• The US denies plans to send more troops to the Middle East, tension with Iran prevails.
• OPEC leader changes the tone, trade optimism is alive while inventories drop.

WTI fails to hold on to recovery gains while trading near $58.35 during early Thursday. The black gold recently surged to the week’s top but pulled back from multiple tops marked in November.

Expectations of a push to broad output cuts by the global oil producers and a lesser than forecast inventory data from the United States (US) propelled the energy benchmark on Wednesday. Also contributing to the prices were the US President’s recent shift conveying “very good” progress in the trade talks with China and the US-Iran tussle.

Traders seem to concentrate more on the recent tweet from the US Department of Defence’s press secretary Alyssa Farah turns down the Wall Street Journal’s (WSJ) earlier piece suggesting the Trump administration’s plan to send 14,000 more troops to the Middle East.

Also, the absence of any upbeat comments from China and increasing odds of the US President Donald Trump’s impeachment, as conveyed by the Washington Post, keep the risk-tone under check.

The Organization of the Petroleum Exporting Countries (OPEC) members are all set to begin a two-day long meeting in the Austrian capital of Vienna and updates from there will be the key energy driver. Bloomberg suggests that the leader Saudi Arabia seems to step back from its earlier push to high production cuts while Iraq also walks back comments suggesting 400,000 barrels a day of an output cut.

Other than the OPEC meeting, prices could also give importance to trade/political headlines for intermediate moves.

Technical Analysis

Multiple tops near $58.70/80 keep the oil prices under check and hence bulls will wait for a clear break of $59.00 to be sure of targeting September 19 top near $59.50. Alternatively, $57.30 acts as immediate support.