Oil intermarket: DXY back to test recent 102 handle highs and OPEC a threat?

Oil continues to consolidate around the $45 handle in WTI today with a low of $44.40 vrs $46.55 highs after a strong bout of supply with all eyes on OPEC.

All eyes are on the Organization of the Petroleum Exporting Countries meeting this Wednesday in Vienna. The meeting is scheduled to start at 10 a.m. Central European Time on Wednesday and then the OPEC's secretary-general is scheduled to hold a news conference in the afternoon. In September, OPEC agreed on targets that would have translated into production cuts of 200,000 to 700,000 barrels a day.

OPEC ministers to discuss proposal that Iran freeze oil output at 3.797 mbpd - RTRS

However, such prospects for an accord is being built on fragile grounds and a discord this week on Wednesday could derail not just bullish oil, but the producers' plans to reach an agreement limiting output altogether and could send oil into a real tail spin and back towards early August lows and a test of the $40 handle very quickly. At the same time, the DXY could be an additional catalyst weighing on the price of oil should this week's nonfarm payrolls prove to be a strong number, supporting the outlook for higher rates in the US under Trump's presidency and plans for fiscal spending, forcing the hands of the Fed to hike rates, perhaps as soon as the next meeting in December. DXY could be set to test the 102 handle again and recent highs on such prospects.