WTI sellers attack $76.00 amid oil supply chatters, US PMIs, API stockpile eyed

• WTI fades bounce off the lowest levels in seven weeks.
• Doubts over OPEC+ output increase plans battle US SPR push amid sluggish Asian session.
• Treasury yields, preliminary readings of November PMI, private inventory data will be in focus.

WTI struggles for clear direction around $76.10-20, down 0.10% intraday ahead of Tuesday’s European session.

That said, the black gold bounced off the lowest levels since early October the previous day amid chatters over the supply crunch and no major response from the US push to ease Strategic Petroleum Reserves (SPR). However, an absence of major catalysts and off in Japan challenges the rebound at the latest. In the same line is the cautious sentiment ahead of the monthly initial PMI figures for November and the weekly industry stockpile data.

Early in Asia, Reuters released an analytical piece backing the market expectations that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, mostly known as OPEC+, may not be able to respect the US pressure for more supplies even if they wish to.

“OPEC+ sticking to its plan of gradually raising output by 400,000 barrels per day (bpd) each month since August, saying it worries a faster increase will lead to a glut in 2022,” said Reuters. The analysis argued, “Yet OPEC+ can't even hit those goals. Production by OPEC+ was 700,000 bpd less than planned in both September and October, according to the International Energy Agency (IEA), raising the prospect of a tight market and high oil prices for longer.”

On the other hand, said White House Press Secretary Jen Psaki said, per Reuters, “US will continue to press OPEC and oil companies on supply and price of oil.” On the same line, Bloomberg shared comments from White House Economic Advisor Brian Deese saying, “Expect Biden to address gas prices in coming days.”

It’s worth noting that US President Joe Biden’s decision to nominate Jerome Powell for another term as the Federal Reserve (Fed) Chair and Richard Clarida for Vice-Chairman propel Fed rate hike concerns and challenge the energy bulls. Additionally, recently fresh covid fears and doubts over China’s economic growth add to the upside filters for WTI crude oil prices.

Moving on, preliminary readings of the November month’s PMIs for the UK, Germany, Eurozone and the US will be important to watch as firmer activities signal more energy demand but also back the rate hike concerns and challenge the oil buyers. In addition to the initial activity numbers for November, WTI traders should also wait for the weekly oil stockpile data from the American Petroleum Institute (API), prior 0.655M, for fresh impulse. Though, qualitative factors and the US dollar moves will be more important to watch.

Technical analysis

Although a bullish spinning top candlestick above 100-day EMA, around $74.75, challenges the WTI bears, recovery moves need to cross a fortnight-old resistance line near $77.10 to convince buyers.