Crude is trading near a 15-month low ahead of OPEC’s monthly report

• Crude oil is near its lows for the year after failing to rally significantly on Monday.
• Markets are gearing up for the monthly OPEC report, with expectations that it will disappoint markets.
• The US dollar index is trading above 101.50, easing a touch after Monday’s rally.

Crude oil is holding steady at $68.00 on Tuesday ahead of the release of OPEC’s monthly report, a key market-moving event for oil prices. Taking into account the recent comments of leading commodity experts and analysts, the report should either have a very bullish outlook or show some further interventions by the OPEC cartel to prevent any further decline in prices. The risk is that the report will contain no action or comment on this, triggering a further decline in oil prices.

The US dollar index (DXY), which tracks the performance of the US dollar (USD) against a basket of currencies, is easing on Tuesday ahead of a very easy US calendar. The main event will take place after US markets close, with the first and possibly only debate between former US President Donald Trump and Vice President Kamala Harris in their race for the White House.

At the time of writing, crude oil (WTI) is trading at $67.94 and Brent at $71.46.

Oil and markets news: Chinese imports could fall further

The monthly OPEC market report is expected to be released at 12:00 GMT.

• Bloomberg reports that Tropical Storm Francine, which is headed for the Gulf of Mexico, is gaining strength. Oil drillers in the area are evacuating crews and halting offshore crude production.
• Hungarian energy company Mol Group will take over the flow of Russian oil at the border between Belarus and Ukraine, to guarantee its maintenance and safe flow to Hungary, passing over Ukrainian soil. The company was forced to do so after Ukraine sanctioned the Russian company Lukoil, which was initially responsible for maintaining and ensuring the transition on Ukrainian soil, Reuters reports.
• Bloomberg reports that Liao Na, chief energy and chemicals consultant at Mysteel OilChem, said China’s crude imports could fall another 1.2 percent year-on-year.
• The American Petroleum Institute (API) is due to release its weekly figures on changes in US crude inventories. In the previous week, there was a reduction of more than 7.8 million barrels. No forecast is available for this week’s number, which is expected at 20:30 GMT.

Technical analysis of oil: done

Crude could take a final hit that could see prices fall further towards $65.00 or even $60.00 depending on how markets interpret the upcoming monthly OPEC report. OPEC is the only market player that could affect prices very quickly. Oil’s unofficial central bank could easily bring prices back to $70.00 if it commits to cutting output further, although the non-unified group appears unable to act decisively to support oil prices.

Additionally, $75.27 will be the first level to which it will return. Next, the $77.43 level aligns with both a downtrend line and the 200-day simple moving average (SMA). If the bulls can break through, the 100-day SMA at $77.71 could trigger a rejection.

On Friday, the key $67.11 level was broken very briefly. For now, the current range between $67.11 and the high of $68.00 is to watch. The next level below is $64.38, the lowest since March and May 2023.

US WTI Crude Oil: Daily Chart