Oil Market Update: Nervousness Surrounding OPEC+ Meeting
- Traders are pre-hedging for potential surprises from OPEC+ on December 1st.
- OPEC+ ministers will gather in person on December 1st ahead of the Output Policy Meeting scheduled for Thursday.
- The US Dollar Index rebounds from lows amid concerns over French budget discussions.
As the US trading session kicks off, Crude Oil is experiencing a rally with nearly 1% gains while nervousness mounts surrounding OPEC+ and its upcoming events. However, a weekly loss seems almost inevitable as traders anxiously await the outcome of the upcoming OPEC+ meeting on output policy, which has been pushed to next Thursday. The market has already factored in a delay in production normalization to the first quarter of 2025.
The US Dollar Index (DXY) is weakening on Friday with only a few US market participants returning post-Thanksgiving. This decline is attributed to the narrowing yield gap between the US and Europe, driven by French yields spiking on political uncertainty. French Prime Minister Michel Barnier has until Monday to propose a reduced budget, or face potential government upheaval by the far-right National Rally party.
Currently, Crude Oil (WTI) trades at $69.40 and Brent Crude at $73.13.
Oil News and Market Movers: Sunday Headline Risks from OPEC+
- Saudi Aramco may lower the official selling price of Arab Light crude by $0.70 per barrel for January sales to Asia, according to estimates from Bloomberg.
- Several OPEC+ ministers will convene at the Gulf Cooperation Council meeting in Kuwait on Sunday to discuss before the Output Policy Meeting on Thursday.
- Charu Chanana, chief investment strategist for Saxo Markets Pte in Singapore, highlights ongoing uncertainties in the Crude Oil market related to weather, demand, and geopolitical developments.
Oil Technical Analysis: Preparing for OPEC+
Crude Oil prices are under pressure, facing downside risks amid reminders of a supply glut in the Oil sector. Market sentiment anticipates a delay in supply normalization, with a potential uptick contingent on OPEC+ deepening or extending production cuts. Key resistance levels include $71.46, $72.13 (100-day SMA), and $76.22 (200-day SMA).
Support levels to watch are $67.12, followed by $64.75 (2024 low) and $64.38 (2023 low). A break below these levels could signal further downside for Oil prices.
WTI Oil FAQs
- What is WTI Oil?
- What drives the price of WTI Oil?
- How do weekly Oil inventory reports impact WTI Oil prices?
- What is the role of OPEC in WTI Oil prices?
WTI Oil is a type of Crude Oil sold on international markets. It is considered high quality, easily refined, and serves as a benchmark for the Oil market.
Supply and demand, global growth, political instability, OPEC decisions, and the value of the US Dollar are key factors influencing WTI Oil prices.
The reports from the American Petroleum Institute (API) and Energy Information Agency (EIA) reflect changes in supply and demand, influencing price movement based on inventory levels.
OPEC’s production decisions can tighten or increase supply, impacting WTI Oil prices accordingly. OPEC+ includes additional non-OPEC members like Russia.