Oil prices have turned sideways at around $85.50 ahead of the OPEC meeting outcome. (Pivot Orderbook analysis)

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• Oil prices have turned sideways at around $85.50 ahead of the OPEC meeting outcome.
• The US economy believes that current economic fundamentals don’t support production cuts.
• A build-up of oil stockpiles is expected to be disclosed by the EIA.

The pair currently trades last at 85.59.

The previous day high was 86.36 while the previous day low was 82.7. The daily 38.2% Fib levels comes at 84.97, expected to provide support. Similarly, the daily 61.8% fib level is at 84.1, expected to provide support.

West Texas Intermediate (WTI), futures on NYMEX, are juggling around $85.50 as investors are awaiting the outcome of the OPEC meeting for making informed decisions. The risk-perceived assets are displaying some corrective moves as the risk-on market profile has eased a bit. Also, the US dollar index (DXY) has found interest near 110.20, which has resulted in a minor sell-off in the oil prices from a high above $86.00.

Wednesday’s OPEC meeting carries significant importance as it is the first face-to-face meeting of OPEC+ members after the emergence of the Covid-19 pandemic. Reports from RTRS dictate that OPEC will consider production cuts by two million barrels per day (bpd). The agenda of announcing production cuts is to support the oil prices.

Meanwhile, US officials are criticizing the move of further cuts in oil production as the current economic fundamentals don’t support the idea of tightening the oil market.

It is worth noting that the higher oil prices will delight Russia, which is providing oil at discounted rates to imported oil-dependent nations.

Apart from that, oil inventory data by the US Energy Information Administration (EIA) will be of utmost importance. The oil stockpiles are expected to build up by 0.097 million barrels for the past week ending September 30. In the US economy, the demand for oil is continuously declining, which could be concluded from weaker US ISM Manufacturing PMI data released on Monday.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 85.59 at the time of writing. Pair opened at 85.77 and is trading with a change of -0.21 % .

The pair is trading above its 20 Daily moving average @ 83.1, below its 50 Daily moving average @ 87.88 , below its 100 Daily moving average @ 97.52 and below its 200 Daily moving average @ 96.74

The previous day high was 86.36 while the previous day low was 82.7. The daily 38.2% Fib levels comes at 84.97, expected to provide support. Similarly, the daily 61.8% fib level is at 84.1, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 83.53, 81.29, 79.87
• Pivot resistance is noted at 87.19, 88.61, 90.85

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