Oil futures are currently in a consolidation phase, following robust gains in the past two sessions. Market participants are eagerly anticipating the upcoming events, notably Wednesday’s release of the EIA stocks report and Sunday’s pivotal meeting of OPEC and its allies. The gathering is poised to address crucial decisions, including the potential extension of existing output cuts into the year 2024, particularly by key players such as Saudi Arabia and Russia.
However, the path to reaching consensus on cuts among other OPEC members may prove challenging, as noted by Robert Yawger of Mizuho. In a recent note, Yawger suggests that the likelihood of a showdown between nations with varying interests is escalating, heightening the possibility of a less-than-smooth meeting. This dynamic could introduce volatility and uncertainty to the market.
The WTI for January experienced a marginal dip, settling down by 0.1% at $77.77 per barrel. The market remains sensitive to geopolitical developments and decisions made by major oil-producing nations.
Looking ahead, the Energy Information Administration (EIA) is expected to release its crude stocks report, projecting an increase of 100,000 barrels in the week leading up to November 17. Analysts, surveyed by the Wall Street Journal, anticipate this uptick to be influenced by a rise in refinery runs and marginal decreases in gasoline and distillate stocks.
The market’s attention is particularly fixated on the unfolding events, with the intricate dynamics of global oil production and potential disagreements among key players setting the stage for a critical period. As the world awaits the outcome of the OPEC meeting and the subsequent EIA report, the oil market remains on alert for any developments that could impact prices and market sentiment.