- Crude Oil is looking for direction after geopolitical tensions between Russia and Ukraine faded over the weekend.
- The OPEC+ meeting on December 1 could be pivotal as a delay in production normalization is expected.
- The US Dollar Index retreats slightly after breaking a fresh two-year high last week.
Crude Oil takes a step back on Monday, trading at around $70, after a calmer weekend on the geopolitical front and ahead of a holiday-shortened week in the US due to Thanksgiving. The focus for the week, apart from any headlines from Russia-Ukraine or the Middle East, will be on the OPEC+ meeting set to take place on Sunday, December 1.
Meanwhile, the US Dollar Index (DXY), which measures the Greenback’s performance against a basket of currencies, is also taking a step back after its stellar performance last week. Over the weekend, President-elect Donald Trump nominated former hedge fund manager Scott Bessent for the Treasury Secretary position. Markets perceive Bessent as a fiscal hawk, targeting a budget deficit of 3% of GDP by 2028, while indicating that he is backing tariff and tax cut plans.
At the time of writing, Crude Oil (WTI) trades at $70.91 and Brent Crude at $74.58.
Oil news and market movers: Headline risk will pick up
- With the US Thanksgiving holiday taking place on Thursday, the weekly American Petroleum Institute release (API) will stay on Tuesday, while the weekly stockpile change numbers from the Energy Information Administration (EIA) and the Baker Hughes Oil Rig Count will be released on Wednesday.
- Volatility and low liquidity could be an issue on Thursday and Friday, with the historic pattern from OPEC+ members to communicate their stance or opinions ahead of the December 1 meeting, Bloomberg points out. Any comments could move Oil markets during Thanksgiving and Black Friday.
- Weekly Vortexa data shows that the amount of Crude Oil held around the world on tankers that have been stationary for at least 7 days rose to 74.83 million barrels as of November 22, a 34% increase compared with the previous week at 55.76 million barrels in the week of November 15th, Bloomberg reports.
Oil Technical Analysis: OPEC+ set to come out ahead of Sunday
Crude Oil price is set to enter a dangerous phase ahead of one of the last OPEC+ meetings for this year. Not only is this meeting crucial in terms of when in 2025 the production normalization will take place, but in the days running up towards that meeting on Sunday, US markets will be closed due to Thanksgiving and Black Friday. In this context, any market moving comments could see sharp moves with thin liquidity and less-than-normal market participants in place.
On the upside, the 100-day Simple Moving Average (SMA) at $72.67 together with the pivotal level at $71.46 just below, are the two main elements acting as a resistance. The 200-day SMA at $76.42 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.
US WTI Crude Oil: Daily Chart
