WTI Crude Oil Trading

1. Fundamentals playing out, weighing heavily on sentiment for lower oil.
2. 54.80 gave out and focus is now on a close below the 38.2% Fibonacci retracement support.

OPEC and allies disappointed the energy markets by failing to commit to bigger production cuts to combat the presumed increase in supply considering easing tensions between the U.S. and Iran.
"Just as risk appetite and drawing inventories started to generate positive momentum and CTA buying in the energy markets, the news that President Trump was weighing the possibility of easing the Iran sanctions roiled the market,"
analysts at TD Securities explained.
The next OPEC meeting will be in Vienna on Dec. 4 and Oman’s oil minister, Mohammed bin Hamad al-Rumhy, said OPEC+ would discuss the possibility of deepening the existing output cut deal then.
Not expecting increases in Iranian crude production any time soon
However, while stored Iranian product could flood the market, and is certainly negative for sentiment, analysts at TD Securities argued that at this point, it is not clear that an easing of sanctions would necessarily get Iran to the negotiating table:
"Any easing measure would most likely come in the form of renewing the previous waivers, which in the grand scheme of things had little impact on Iranian production. Furthermore, Pompeo remains an Iran hawk and the administration stated the maximum pressure campaign remains, even after Bolton's dismissal." The analysts at TD Securities are not expecting increases in Iranian crude production any time soon.
However, further justifying the bearish case for now, OPEC on Wednesday lowered its forecast for global oil-demand growth in 2019 and 2020 and, in adition, the Energy Information Administration reported that U.S. crude supplies fell by 6.9 million barrels for the week ended September 6th for the fourth weekly decline in a row. The IEA report warned of "daunting" surpluses in 2020 -
"But with the new Saudi oil minister and the Aramco IPO around the corner, it would not be inconceivable that the Saudi's deepen their cuts for a period of time, suggesting current weakness in markets may be over-exaggerated in the near term. Nonetheless, the selloff has crippled the upward momentum, forcing CTAs to abandon their recent buying programs, with downside triggers within reach once again at $54.18/bbl for WTI,"
the analysts at TD Securities argued.

WTI levels
Technically, the daily doji had been painted on the daily time frame earlier in the week and it has certainly played out well, with an aggressive sell-off of over 6.5% down to trendline support. 54.80 gave out and focus is now on a close below the 38.2% Fibonacci retracement support of the July swing highs to May-July horizontal support which guards 53 the figure and the 23.6% Fibo of the same range. The upside target is the 78.6% Fibo and Sep highs in the 58.70s.

1. WTI struggles to justify mixed signals from the trade/political frontier amid the overall USD strength weighing on oil prices.
2. The US President shows readiness to meet the Iranian leader but Treasury Secretary’s comments stay alarming.
3. EIA, API registered inventory draw, Baker Hughes data awaited.

With the contrasting trade/political headlines joining hands with the US Dollar (USD) strength, WTI takes the rounds to $55.00 amid initial Friday trading.
The energy benchmark has recently dropped as the Saudi Arabia, Russia, and other major oil producers from the Organization of the Petroleum Exporting Countries Plus (OPEC+) group refrained from any further production cuts while pushing some of the non-compliant countries.
Adding to the pessimism could be the latest wave of bearish monetary policy announcements from the European Central Bank (ECB) that indicated trade war’s negative impact on the global economy. It should also be noted that US and Chinese goodwill gestures were largely ignored by the black gold traders amid overall greenback strength.

On the political front, the US President Donald Trump showed readiness to meet the Iranian counterpart while also considers allowing France for the $15 billion line of credit to the Middle East nation if it returns to Obama-era pact. However, the US Treasury Secretary Steve Mnuchin continues to hold its firm bias against the Arab nation.
Traders will now look forward to weekly Baker Hughes Rig Counts data for the US oil rigs, previous 738, for fresh impulse while also keeping an eye over trade/political headlines.

Technical Analysis
FXStreet Analyst, Ross J Burland, spots Doji candlestick formation on the daily chart to convey his bearish bias for WTI:
Bears are back in control following that daily doji printed earlier in the week. An aggressive sell-off of over 6.5% down to trendline support occurred overnight. 54.80 gave out and focus is now on a close below the 38.2% Fibonacci retracement support of the July swing highs to May-July horizontal support which guards 53 the figure and the 23.6% Fibo of the same range. The upside target is the 78.6% Fibo and Sep highs in the 58.70s.

1. WTI drops in Europe as global oil demand growth concerns take over.
2. Trade progress limits losses ahead of US Consumer and Rigs Count data.

WTI (futures on Nymex) broke its Asian consolidative mode to the downside in the European session, now looking to retest the 54.00 support zone ahead of the crucial consumer and rigs count data from the US.
Downside looks more compelling, despite trade hopes
The barrel of WTI failed to sustain the bounce above the 55 handle and turned south, as the sentiment remains weighed down by looming concerns about a slowdown in the global economy and oil demand.
Both the OPEC and International Energy Agency (IEA), in their latest monthly oil market report, raised concerns over dwindling oil demand growth outlook. Meanwhile, increased expectations that the US could ease its stance on Iran combined with a non-event OPEC+ meeting continue to collaborate to the downside risks.

However, the downside appears cushioned amid a better market mood, fuelled by the recent progress on the US-China trade front. The US President Trump delayed tariffs on Chinese good by two weeks in response to China’s exemptions of 16 US products from its tariffs list. Meanwhile, the US President Trump hinted that he would rather get a whole deal done with China rather than an interim deal.
Also, declining US crude inventories continue to lend support to the barrel of WTI. According to the latest US Energy Information Administration (EIA), the US crude oil stockpiles fell last week to the lowest in nearly a year to 416.1 million barrels, down 6.9 million barrels in the week to Sept. 6.
Attention turns towards the US Retail Sales, Michigan Preliminary Consumer Sentiment and Baker Hughes Rigs Count data for fresh direction on the prices.