Crude Oil Price Hover at $68.50 as OPEC+ Weighs Extending Production Cuts
Oil prices stabilized at $68.50 on Thursday ahead of the OPEC+ meeting, with investors closely watching for signs of extended production cuts.
The Organization of the Petroleum Exporting Countries and its allies are expected to prolong current supply cuts by at least three months into 2024. OPEC+ aims to balance the market amid fluctuating demand and geopolitical tensions.
Analysts anticipate that OPEC+ may choose between bolstering prices or defending market share. “The decision could prompt a short-term market reaction, but broader expectations of a U.S. economic recovery and persistent Middle East unrest suggest a potential price rally by year-end,” noted Satoru Yoshida of Rakuten Securities.
U.S. Inventory Drawbacks Support Prices
In the United States, crude stockpiles fell more than expected last week as refiners ramped up operations, according to the Energy Information Administration. However, gasoline and distillate stockpiles posted higher-than-anticipated increases, reflecting mixed signals for oil markets.
The U.S. Energy Information Administration reported a sharp decline in crude inventories, which offered support to prices. Meanwhile, the market remains cautious as traders assess the possibility of a bearish surprise from OPEC+.
Geopolitical Risks Add Complexity
Middle Eastern tensions add another layer of uncertainty to the oil market. Israel has warned of renewed conflict with Hezbollah if a fragile truce collapses, signaling potential instability in the region. Meanwhile, U.S. diplomatic efforts continue, with President-elect Donald Trump’s envoy visiting Qatar and Israel to negotiate a ceasefire in Gaza.
Despite these pressures, market strategists like Yeap Jun Rong from IG caution that OPEC+ faces challenges ahead. “OPEC+ may struggle to sustain prices with potential production increases from the Trump administration in 2025,” said Yeap.
Daily Technical Outlook: WTI Crude Oil – December 5, 2024
WTI Crude Oil is trading at $68.50, hovering near its pivot point at $68.75, signaling indecision as traders await further direction. The price action forms a descending pattern, with immediate resistance at $69.08, followed by $69.61 and $70.50.
On the downside, immediate support is seen at $67.70, with additional levels at $67.09 and $66.59.
Technical indicators suggest a bearish bias in the short term. The RSI has dropped to 52.96, signaling momentum is losing steam, but remains above oversold territory.
The 50-day EMA at $68.75 aligns with the pivot point, offering key resistance. A breakdown below $67.70 could trigger a test of lower support at $67.09, while a recovery above $69.08 would suggest bullish momentum.
Traders should watch for confirmation of the breakout direction, with U.S. crude inventory data expected to influence volatility.
Key Insights:
OPEC+ Impact: Decision likely to extend cuts into 2024.
Inventory Data: U.S. crude stockpiles decline, offering price support.
Geopolitical Risks: Middle East tensions add pressure to markets.
ABOUT THE AUTHOR
See More
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals