WTI bears step in ahead of weekly resistance and OPEC meeting

• WTI bulls denied a run towards weekly resistance as price flips.
• The markets are now focussing on the OPEC meeting outcome, with supply expected. 

West Texas Intermediate (WTI) crude oil was lower on Tuesday by the close of play on Wall Street. 

the spot price ended near $68.44 and was down nearly 1%. The price fell from a high of $69.32 to a low of $68.19 

as damage assessments continue following Hurricane Ida's weekend landfall near New Orleans at Category-4 strength.

According to the Bureau of Safety and Environmental Enforcement, 1.71-million barrels of oil production from Gulf platforms, or 93.7% of the total, remains shut-in.

The U.S. Department of Energy on Tuesday said nine refineries capable of processing 2.3-million barrels per day of oil, 13% of U.S. capacity, have shut in because of storm damage and power loss. It said 1.1 million customers, mostly in Louisiana, are still without power.

Counterintuitively, the prospects of such damage to the region's refining cluster would leave the oil without buyers which gave oil prices some temporary relief at the start of the week. 

However, overall, the price was pressured due to the suspending gulf oil production and shuttering of the region's refining cluster.

Meanwhile, and additionally, spot long positions were reduced ahead of a key OPEC+ meeting whereby investors expected there to be an increase of supply of 400,000 barrels per day.

''Looking onto the horizon, however, energy traders increasingly see the risk that the ongoing large deficits will morph into a surplus as soon as 2022Q1,'' analysts at TD Securities explained. 

''This will eventually challenge OPEC+'s gradual production growth, particularly as competition in the US shale patch helps output firm once again.''

''Nonetheless, the stage is set for significant deficits in the coming months that should continue to support energy prices for the time being.''

WTI technical analysis

Technically, the price of oil was on the verge of a test of the psychological $70 level which guards the weekly counter-trendline near 69.50/71.

A break of the near term daily and weekly resistance structures, including the counter-trendline, will leave scope for a continuation towards July's highs near 77.00.

On the downside, however and considering the recent rejection, 68.00 is eyed as a round figure guarding space to  66.50 suspected support. 

A break there will expose daily swing lows near 61.80 then 57.30.