Oil prices slipped ahead of the OPEC+ meeting as traders were not expecting anything more than a modest rise in output. Indeed a Bloomberg survey of traders and analysts suggested the alliance led by Saudi Arabia was more likely to keep output steady, despite the US’s call to boost production. Ongoing concern over the global outlook has also kept a lid on prices, as markets watch Fed comments and the fallout from Pelosi’s visit to Taiwan. The front end USOIL contract had tested down to $93.00 per barrel, ahead of the meeting.
In the end, the cartel surprised markets by agreeing to raise output by 100k barrels per day from September. USOil jumped over $3.00 per barrel to $96.50, however, 100k per day is a modest production rise. Bloomberg reported that is the smallest output increase in its history. The ISM Services PMI and EIA Crude Oil inventories data later in the day and Friday’s NFP data are the next key economic data points to watch. Technically, $93.00 is providing support so far this month, with $96.00 the 38.8 Fibonacci level from the July-August fall and $97.00 the 50.0 Fib level. The 20-day moving average sits above the 61.8 Fib level at $98.75. The intra-day low last month touched $90.50, on July 18. The market is likely to remain in a supply-demand tug-of-war with a lot of uncertainty over demand as central banks continuing to hike rates to crimp global economic activity.