Oil looks set to break below $70 with US taunting OPEC+

NEW YORK (December 6) Oil prices are breaking the November low as more supply is hitting the market with US exports topping nearly 6 million barrels per day. Meanwhile, Saudi Arabia is slashing prices for Crude Exports into the Asian region. It becomes clear that what OPEC+ has reproduced as a deal isn’t enough to counterweight the effect from US Oil barrels hitting the markets. 

Meanwhile, the US Dollar (USD) is firming up for a third straight day. The DXY US Dollar Index is near 104.00 and could pop higher during the week. Although US yields are declining, they are declining less rapidly than other peers, which favors the US Dollar against most other currencies.The Euro, the Chinese Yuan and Central European currencies are the biggest losers. 

Crude Oil (WTI) trades at $72.32 per barrel and Brent Oil trades at $77.12 per barrel at the time of writing. 

Oil news and market movers: US exports become omen for OPEC+

• US Crude exports could reach about 5.7 million barrels a day, according to ship-tracking firms Kpler and Vortexa. The Energy Information Administration (EIA) data on Wednesday could confirm these findings. 
• Saudi Arabia has cut its pricing for Crude destined for the Asian market, according to a Bloomberg survey. 
• Overnight, the weekly numbers from the American Petroleum Institute (API) revealed a build of 0.594 million barrels against the drawdown of 0.817 million barrels a week earlier. 
• On Wednesday, the Energy Information Administration (EIA) is due to release the weekly change in US Crude stockpile. Expectations are for a draw of 2.267 million against the buildup of 1.609 million a week ago. 

Oil Technical Analysis: Going down 

Oil prices are sinking, breaking below November’s low.  While OPEC+ faces a supply surplus, this surplus is getting bigger as the US becomes a big Oil producer. By dumping 6 million barrels per day on the global market, the excess surplus could well linger on for months before OPEC+ can finally tweak its policy in order to adjust production to liquidate the surplus. In this context, more downside is to come forOil prices until  an OPEC+ decision or another catalyst takes out the surplus. 

On the upside, $80.00 is the resistance to watch out for. Should crude be able to jump above that again, look for $84.00 (purple line) as the next level to see some selling pressure or profit taking. Should Oil prices be able to consolidate above there, the topside for this fall near $93.00 could come back into play.

On the downside, the soft floor near $74.00 is crumbling with a fresh low for November. This level is acting as the last line of defence before entering $70.00 and lower. Watch out for $67.00, which aligns with atriple bottom from June, as the next support level to trade at. 

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