• OPEC-led cut cushions Hurricanes damage. After retreating from 3Q17 high of US$50.4 (1 Aug) to a low of $45.6 (31 Aug), WTI rebounded 5.9% to end at $48.3. The rebound was driven by news that OPEC and its allies are considering to prolong cuts that expire in March by more than three months , as well as report that OPEC's oil output fell in August for the first time since March. Meanwhile, U.S. refineries closed by Hurricane Harvey more than two weeks ago continue to restart while the downgrading of Hurricane Irma’s strength to Category 1 this week also eased worries that energy demand would be hit hard.

• Potential symmetrical triangle breakout. Following a 2-day rebound, WTI’s near term outlook has turned mildly positive as it is in the midst of forming a symmetrical triangle breakout soon to retest $49-50 levels if oil prices manage to build a base above support trendline near $47. On the flip side, a violation of $47 support will witness further retracement towards $45.2-47.3 territory.

Source: Hong Leong Investment Bank Research - 13 Sept 2017