Oil steady as markets brace for OPEC headlines ahead of this weekend’s meeting

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  • WTI Oil traders brace for headline risk as OPEC ministers are due to meet this weekend.
  • The US Dollar continues to weaken, supporting commodity prices. 
  • Oil could recover to $84 should more and longer production cuts be announced at the next OPEC+ meeting. 

Oil prices are holding flat this Tuesday in a very narrow trading range while nervousness builds ahead of the OPEC+ conference over the weekend. With the meeting due on November 26th, it looks like rumors are spreading in the markets that Saudi Arabia might prolong and broaden its production cut in volume and duration.  Oil refineries are caught in the middle with stock piles rising, triggering less demand, margins becoming thinner and supply wearing thin. 

Meanwhile, the US Dollar (USD) keeps printing a fresh two-month low and is at a crucial point in terms of price action in the US Dollar Index (DXY). The DXY price is crossing two very crucial technical moving averages which means that a more substantial downside could come. The Greenback could ease further, for example against the Euro (EUR/USD) to 1.1180, which would mean another 2.5% devaluation for the Greenback. 

Crude Oil (WTI) trades at $77.42 per barrel and Brent Oil trades at $81.92 per barrel at the time of writing. 

Oil news and market movers: OPEC will be talk of the town

  • Crude oil futures are trading are seeing volatility drop to a 7-week low as bets for more downturn are soaring in the options markets. 
  • Italy has boosted its oil imports from the US in September to the highest level in over four years. The United States has been ramping up its production in order to fill the gap of the banned Russian supply for the European bloc.
  • Russia has axed its seaborne Crude exports to the lowest since August of this year. The cut comes to counterweigh the recent uptick in October, ahead of an OPEC minister’s meeting this weekend. 
  • RBC Capital Markets LLC issued a report warning that more and deeper production cuts could come at the next OPEC+ meeting on November 26th. Efforts this time would not come from Saudi Arabia alone, and would be a joint effort in order to share the burden, RBC’s analyst Helima Croft said. 
  • Iranian Oil Minister Javad Owji said that Iran’s Oil production will rise to 3.6 million barrels by March next year and to 4m bbl/day in the year after.
  • This Tuesday the American Petroleum Institute is due to release its weekly stockpile numbers. Previous data showed a build of 1.335 million barrels, no forecast foreseen for this week’s number. 

Oil Technical Analysis: API build in stockpile means more downturn

Oil prices are set to move as market expectations are soaring for any kind of production cuts from OPEC. With the OPEC+ ministers meeting this weekend, markets will be on the lookout for any additional action that could cement a floor in crude prices, which at the moment is proving a challenge. The lingering Israeli-Palestinian situation remains an elephant in the room, certainly after the seizing of a tanker in the Strait of Hormuz by Iran-backed Houthi rebels.  

On the upside, $80.00 is the resistance to watch out for. Should crude be able to jump higher again, look for $84.00 (purple line) as the next level to see some selling pressure or profit taking. Should Oil prices be able to consolidate above there, the topside for this fall near $93.00 could come back into play.

On the downside, traders are seeing a soft floor forming near $74.00. This level is acting as the last line of defence before entering $70.00 and lower. Once in that area, markets might factor in the risk of a surprise intervention from OPEC+ to jack Oil prices back up again. 

US WTI Crude Oil: Daily Chart

US WTI Crude Oil: Daily Chart

(This story was corrected on November 21 13:34 GMT to state that US Dollar was at a fresh 2-month low, not at a 2-month high.)


WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.

Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.

The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.

OPEC (Organization of the Petroleum Exporting Countries) is a group of 13 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.