• WTI scales higher for the second straight day and recovers further from a multi-month low.

• Expectations for additional supply cuts by OPEC+ turn out to be a key factor lending support.

• Worries that a deeper global economic downturn will dent fuel demand might cap the upside.

West Texas Intermediate (WTI) Crude Oil prices build on last week's goodish rebound from the $72.40-$72.35 area, or the lowest level since July 7 and gain some follow-through positive traction for the second successive day on Monday. The commodity currently trades around the $76.65 region, up nearly 1% for the day, though any meaningful appreciating move still seems elusive.

Media reports suggested that OPEC+ could discuss deeper supply cuts to shore up prices at its upcoming meeting on November 26, which, in turn, is seen as a key factor lending support to the black liquid. Furthermore, Saudi Arabia and Russia – the two major producers – are also expected to extend oil production cuts through next year. This comes after OPEC, in its monthly report, to its relatively high 2024 oil demand growth forecast.

That said, the International Energy Agency (IEA) has a lower 2024 demand growth forecast and said the market could shift to a surplus in the first quarter. Moreover, worries that a deeper global economic downturn will dent fuel demand might continue to undermine Crude Oil prices and keep a lid on any further gains. This, along with the recent technical breakdown below the 200-day Simple Moving Average (SMA), warrants caution for bulls.

Traders might also refrain from placing aggressive directional bets and prefer to wait for the release of the FOMC meeting minutes on Tuesday for cues about the future rate-hike path. The outlook will play a key role in influencing the near-term US Dollar (USD) price dynamics and drive USD-denominated commodities. This makes it prudent to wait for strong follow-through buying before confirming that Oil prices have formed a near-term bottom.

Technical levels to watch