Crude prices consolidate ahead of OPEC+ meeting and ADP report

After two consecutive falling days, crude prices found some support above 68.00 dpb ahead of the OPEC+ meeting due today. However, a 69.00 is still considered as a firm resistance.

The Organization of Petroleum Exporting Countries, Russia, and allies, also known as OPEC+, will meet at 15:00 GMT today.

OPEC revised up its demand outlook

According to the early Wednesday report, OPEC revised its outlook for demand this year and next year, estimating that crude demand will grow by nearly 4.2 million barrels per day in 2022, close to 1 million barrels per day more than the previous year forecast.

In 2021, OPEC anticipates that global oil demand will grow by 5.95 million bpd after dropping by 9 million bpd last year due to the COVID-19 pandemic.

There is a good chance that OPEC policies would stay the same despite pressure from the United States to boost output to tackle rising gasoline prices.

As a result, analysts expect that OPEC and its allies, led by Russia, will continue adding supply by 400,000 barrels a day over the next few months until last year's emergency production cuts are restored.

A report released by the American Petroleum Institute (API) shows US oil reserves fell by over 4 million barrels last week due to Hurricane Ida in the Gulf of Mexico, more than expected of 2.833 million barrels, thus providing short-term support to prices.

Uptrend is running out of steam as crude is trading in a consolidation pattern near the firm resistance level at 69.00. as price action suggests breaking either above or below the pattern may determine the further direction of the market in the short term.

Events of the day

On Wednesday, the Energy Information Administration will release its weekly report at 14:30 GMT, which is expected that 3.1 million barrels of crude stock will drop.

At 12:15 GMT, payroll processor ADP will release its numbers for private-sector hiring in August. If the number is higher than the 613,000 expected, it might be a sign that an immediate tapering of bond purchases is likely. Currently, it looks like a September tapering announcement will heavily depend on this week's US jobs report.

Investors will also closely watch the manufacturing PMI from the Institute of Supply Management, released at 14:00 GMT.