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WTI rebounds to $ 42, OPEC decision looms

FXStreet (Mumbai) - The oil futures on Comex rebounded in Asia, in tandem with the recovery seen across the commodities space. While a generalized greenback correction also lifted oil from five-day lows.

WTI flirts with 42 barrier

Currently, WTI rises 0.80% to 41.98, fighting hard to extend beyond the 42 handle. Oil prices took a breather from three back-to-back session of losses and attempts recovery amid broad based US dollar weakness.

However, the recovery appears to lack follow through as persisting supply glut worries and uncertainty surrounding the Dec 4 OPEC meeting keeps the gains in check. OPEC member are scheduled to meet this Friday in order to discuss topics such as oil production levels and price stability.

Moreover, the latest mixed Chinese manufacturing surveys reinforced China slowdown fears and will therefore keep the bulls on the side-lines. China is world’s second largest oil consumer.

Meanwhile, the focus is back on the crude inventory levels, with the upcoming API report closely eyed ahead of Wednesday’s EIA crude reserves report.

Analysts at ANZ noted, "The market will now be expecting crude oil stocks to decline through to the end of the year, in line with seasonal patterns. A failure to do so could see WTI crude fall through $40 per barrel in coming weeks."

WTI Oil Technical Levels

WTI oil has an immediate resistance which stands at 42.60 (Nov 30 high) above which gains could be extended to 43.46 (Nov 24 high). While to the downside, the immediate support is at 41.51 (Nov 30 Low), below which the prices could drop to 40.41 (Nov 23 Low).

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