Crude oil prices struggle to shift into a recovery mode on Tuesday after a rejection from the $62 region at the start of the week. Brent has been flirting with the $61 handle, where the 100-DMA lies. The futures struggle for direction despite a modest bullish bias amid a heightened uncertainty on the trade front and ahead of the OPEC+ meeting due later this week.
The cartel and its allies are widely expected to extend the deal and the question is if the producers will show a willingness to reduce crude output more aggressively as us shale oil production hit another all-time high last month. So far, there are no clear signs of a consensus on this issue among the alliance members, which makes oil traders nervous these days.
In the short term, market participants will focus on the US industry data out of the United States. Should the API report point to a decline in crude oil inventories, Brent could gain marginally but in general, market reaction to the release will likely be rather muted and short-lived as investors are preparing for the crucial OPEC+ meeting, with the outcome of this event will set the tone for the market in the medium term.
Technically, Brent needs to hold above the $60.30 area in the near term, with the immediate important target comes around the $62 handle. Depending on the verdict of OPEC countries, prices could easily get back below the $60 level should the alliance disappoint.