Oil supported on API, but skepticism over OPEC is a blockade

Oil has been choppy between $48.00bbls and $49.00bbls in October, but has made a fresh high within the ascending channel at $49.45bbls.

Oil has been driven by a possible deal on output by the Organization of the Petroleum Exporting Countries, (OPEC). There was a tentative agreement made from OPEC to cut output to between just 32.5 million and 33 million barrels a day and that supported a bid the three month highs along a bullish drift.

However, there have been two sides to the price action and the price was struggling overnight as skepticism about such a deal coming to fruition heightened at the same time as the dollar continued to advance across the board. OPEC do not meet again for several weeks and there is plenty of time for the likes of large producers such as Russia and OPEC members to keep raising the output and weigh on the price.

Meanwhile, The American Petroleum Institute (API) data arrived and lifted the price as reporting that domestic crude inventories probably fell for a fifth straight week, dropping by 7.6 million barrels. Tomorrow, The U.S. government's Energy Information Administration (EIA) will report official stockpile numbers. Some analysts expect the EIA to report a stock build of 2.6 million barrels for the week ended September the 30th 2016.