During Monday's (November 27th) Asian session, WTI crude oil oscillated narrowly, and it is currently trading at 74.9 dollars/bbl. Oil prices continued to fall slightly on Friday to achieve a 4-consecutive decline. At the same time, the market seems to have reached a consensus that oil prices will keep dropping unless OPEC+ continues and expands the production cuts. However, the expansion seems unlikely now, which is the reason why the bears are actively pulling the price down. Now, the market maintains the logic that original production cuts will be kept. In the past 2 years, results from the OPEC+ production cuts were satisfying due to the support of Saudi Arabia, and the probability of extending production cuts is great, but Saudi Arabia is trapped in a dilemma now. On the one hand, Iran, Brazil, Venezuela, the United Arab Emirates, and other countries are desperately trying to expand their production to capture the market share. On the other hand, Russia is also resistant to production cuts after finding new buyers. Thus, if Saudi Arabia cuts its production, it will lose its market share. If it expands production, oil prices will fall below the nearly two-year low of 60 dollars/bbl next year because of the surplus. Compared to the results of the production cuts, the decline in oil prices is lethal to Saudi Arabia, so it is in a dilemma. The answer will be released this Thursday, and the oil price oscillation will be increased. It is not recommended to bet on a rise or fall market, and aggressive traders can buy calls and puts at the same time to bet on greater oscillation.

Data: U.S. November Markit manufacturing PMI was 49.4, back below the threshold of 50. Comparingly, the service sector activity expanded slightly to 50.8, a four-month high.

Today's focus: U.S. New Home Sales monthly rate and the Current General Business Activity from the Dallas Fed. More importantly, to focus on the news and results related to this week's OPEC + meeting.

Last Friday, oil prices showed signals about a deep plunge and it depreciated in the hourly chart, closing the daily chart lower. Today, oil prices opened lower in the Asian session, and once dropped below 75 followed by a weak oscillation. Regarding the daily chart, the bearish trend is clear, but there is also potential support as the MACD has completely entered the oversold zone with a golden cross appearing. On Thursday, there will be the OPEC+ meeting, and the oscillation will be slight before that. If the production cuts expand, WTI will reverse. In contrast, WTI may test the previous low at 72 if the original production cuts are maintained. However, the downside space is considerable if OPEC+ fails to reach an agreement, despite that the possibility is low. We expect that the production cuts will be maintained. Although WTI will drop, it will be swift. After a period, an upward reversal will take place, and we should not keep a bearish view but not enter short positions at present. Now, as a big bear candle has covered the previous two bull candles, WTI may extend the downward trend in the hourly chart, and the support below will be near 74.5. Today, investors should buy low and sell high between 73.8 and 77.1.

Trading direction: Long

Entry price: 73.800

Target price: 77.100

Stop loss: 73.300

Support: 73.500/72.500

Resistance: 77.100/78.500