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Crude oil prices ticked higher on Tuesday after retreating the day before as weighed down by Iraqi oil minister’s comments on Sunday that the nation should be exempted from production cuts proposed by the OPEC. Data about the U.S crude inventories are scheduled to be published later today and on Wednesday.
Possibility that the output curb deal, which assigns a specific production ceiling for each OPEC and non-OPEC nation, could not be reached this November, was strengthened after Iraq on Sunday claimed an exemption from production cuts. The second biggest producer in OPEC after Saudi Arabia said it should be exempted from any deal that requests participants to scale back their output, as the country needs revenue from oil to sustain the war against the Islamic State militants.
In an informal meeting last month, OPEC reached a preliminary agreement to snap the cartel’s daily production to a range between 32.5 to 33 million barrels a day. However, the agreement did not specify any individual output quotas. Considering the record-high output that the 14-nation bloc pumped out in September, and exemption requests from Iraq, Iran, Nigeria and Lybia, investors have been concerned that OPEC officials may have to leave its upcoming meeting empty-handed.
Meanwhile, Venezuelan Oil Minister Eulogio Del Pino is visiting Moscow on Tuesday to hold a bilateral meeting with his Russian counterpart Alexander Novak. Two oil ministers will discuss coordinating action on the global oil markets. Russia has pushed its production to a post-Soviet high of 11.2 million barrels a day in October.
Russia officials said they will attend the meeting in Vienna, which is scheduled for November 30, to negotiate options to curb crude oil output. Nonetheless, Russia’s commitment to join the deal remains uncertain, especially when the country’s biggest energy company, Rosneft, recently stated that it would ramp up production if the demand requires.
Besides the closely-watched OPEC’s limiting production plan, investors are also keeping an eye on the weekly changes in U.S. crude inventories. Markets estimate a growth of 400,000-barrels in the U.S. crude stockpiles in the week ended October 21st. The private American Petroleum Institute is due to publish its weekly crude stocks estimates later today while official data by the U.S. Energy Information Administration is due for release on Wednesday.
Fig: BRENT D1 Technical chart
Brent has been trading sideways above the 51.30 support after a sharp rally in the period from September 28 to October 10. The prices have failed to fall below the 51.30 for several times and now are facing another support that is the short-term DMA20. RSI is moving close to the 50 line, suggesting equal forces of buyers and sellers in the market. Given the support from two MAs placed below the price action, Brent may edge up today.
Buy Digital Call Option from 51.30 to 51.85 valid until 20:00 GMT October 25, 2016