Crude Oil slowly picks up with traders bracing for OPEC+ meeting this week
- Oil prices starts to tick up with traders prepositioning for the upcoming OPEC+ meeting on Thursday.
- OPEC+ got accused for the recent downturn in oil prices by Iranian official Afshin Javan.
- The US Dollar Index jumps as Trump threatens BRICS with tariffs and the Euro struggles due to tensions on France’s budget situation.
Crude Oil price is starting to tick up with tensions brewing ahead of the most crucial OPEC+ meeting before 2025, to be held on Thursday. Before the gathering, Iranian official Afshin Javan threw the cat among the pigeons by issuing an opinion piece pointing to OPEC+ as the culprit for the current low prices. The main takeaway of the opinion piece was that OPEC+ has kept oil prices elevated for too long, financing its competitors to boost cheaper alternatives.
A heated debate ahead of Thursday’s online meeting after that opion piece from Afshin Javan, in which OPEC+ is set to convene on the extension of its production curbs.
Meanwhile, the US Dollar Index (DXY) – which measures the performance of the US Dollar (USD) against a basket of currencies – is rolling through markets. The index gains ground after Trump said over the weekend that he would impose tariffs if BRICS countries tried to replace the USD with their own reserve currency.
The Euro (EUR), the main currency in the DXY basket, is struggling due to increasing odds of the French government falling as early as this week as Marine Le Pen threatened to support a no-confidence vote against the current prime minister unless the government accepts some of its demands about the budget. French Finance Minister Antoine Armand said Monday on Bloomberg television that France will not be held hostage, but markets have started to price in this political turmoil by punishing France’s sovereign debt.
At the time of writing, Crude Oil (WTI) trades at $68.90 and Brent Crude at $72.75.
Oil news and market movers: Iran throws in a cat amongst the pigeons
- Afshin Javan, the No. 2 official in the Iranian delegation to OPEC+, published an opinion piece on November 26 that got picked up by Bloomberg on Monday. OPEC+ faces a supply glut largely of its own making following several years of production cuts. “This strategy in support of prices has effectively encouraged higher supply outside the group, particularly on the part of the US,” he said.
- Poland has shut down part of the Druzhba pipeline after detecting a leak, Bloomberg reported on Sunday, citing Polish media and the local firefighting service that responded to the leak report.
- OPEC+ is set to meet on Thursday online to discuss what to do with its production curbs for 2025.
Oil Technical Analysis: What could happen next for OPEC+
Crude Oil prices are stuck in a tight range as it appears that the OPEC+ theater is starting to fall apart. With the outlash from Iran, a heated discussion could be taking place on Thursday. Still, in terms of production curbs, OPEC+ can do little to tweak expectations, so the chances for more downturn in Oil prices are bigger than those for an upturn.
On the upside, the pivotal level at $71.46 and the 100-day Simple Moving Average (SMA) at $72.01 are the two main resistances. The 200-day SMA at $76.18 is still far off, although it could be tested if tensions intensify further. In its rally towards that 200-day SMA, the pivotal level at $75.27 could still slow down any upticks.
On the other side, traders need to look towards $67.12 – a level that held the price in May and June 2023 – to find the first support. In case that breaks, the 2024 year-to-date low emerges at $64.75, followed by $64.38, the low from 2023.
