Crude oil prices rebound today adding 1.85% at $56.18 per barrel after Friday’s steep losses. Oil prices getting a boost today after stronger Chinese manufacturing data shows the economy is returning to growth. Oil traders will also focus today on the release of US ISM Manufacturing PMI that will reveal a picture of the US industrial sector that is a major factor of the world’s oil demand.
Crude oil prices ended 4.5% lower on Friday as the legislation signed by President Trump that supports Hong Kong protesters increased investors worries that a trade deal might be not that close if China proceeds with retaliation. Meanwhile, political tensions eased in Iran and that reduce the risks to oil disruption from a major oil-producing country.
U.S. crude oil stocks increased by 1.6 million barrels as the production hit a record high at 12.9 million barrels per day while refinery runs slowed which further weighed on the prices.
Reports that OPEC+ producers might consider crude oil production cuts in their next meeting on December 5th in Vienna supported oil prices the last two weeks. Russia said that prefers a wait and see approach before committing to any further extensions in production cuts by OPEC as the country producing already above quota agreed with OPEC.
The Crude oil prices sharp decline on Friday cancelled the recent bullish momentum which started in early October, as the price breached below the 100 and 200-day moving average. The move today is giving a positive signal as the crude oil price returns above the 100-day moving average. Crude oil price needs to break above the first resistance at $56.24 the daily top; if buyers clear that level, the next target will be the 50-day moving average at $57.53. Crude oil will face strong supply at 58.26 the high from Friday’s session before an attempt to climb above the 100-day moving average at $60.87 which will provide a strong bullish momentum.
On the other hand, immediate resistance stands at $55.42 today’s low, while more bids might emerge at $55 the low from Friday’s trading session. A break below that level might pave the way for a test of 54.10 the low from November 1st.
Crude oil traders should be patient and wait the outcome of the OPEC meeting later this week that will provide fresh clues about the oil supply and how “compact” will be the decision. Crude prices might get a boost if OPEC agrees on deeper output cuts.More content