Oil snaps losing streak ahead of OPEC+ meeting

2023-11-28
Summary:

Oil prices rose on Tuesday ahead of a key OPEC+ meeting. Expectations are high for extended and deeper production cuts to support prices.

Oil prices rose on Tuesday, snapping a losing streak ahead of a crucial OPEC+ meeting. It is widely expected that producers will deepen and extend cuts to oil production to prop up oil prices.

Last week OPEC decided to delay the meeting to 30 Nov from 24 Nov, which sparked fears that the its members could hardly reach a deal on output policy.


But the group has moved closer to a compromise to address concerns of several African producers since then, according to OPEC+ sources. Another source said deeper cuts were under deliberation.


The UAE looks poised to ramp up exports of Murban crude early next year while Iraq is pushing ahead with a plan to resume northern crude exports via Turkey by discussing with Kurdish officials.


Elsewhere South American countries are looking to steal market share. Oil production in Venezuela ramps up and Petrobras lifted its year-end production targets by 100,000 bpd.


Money managers cut their net long US crude futures and options positions in the week to 21 Nov, the CFTC said. High crude stockpiles in the US have added to downward pressure on prices.

XTIUSD

For WTI crude, it is worth noting that the 50 EMA is starting to break down below the 200 EMA, kicking off a death cross. The bearish bias will likely hold unless OPEC+ surprises with more-than-expected cuts later in the week.


Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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