In a day marked by fluctuations, oil prices experienced notable volatility, notably on Wednesday, briefly plunging following reports of OPEC+ deferring its meeting from the 16th to the 20th of November.
The market’s initial response hinted at concerns among traders about a potential lack of unity within the coalition regarding supply cuts as the new year approaches. However, this sentiment swiftly reversed, underlining the dynamic nature of oil markets.
Speculation has been rife throughout the day, with market participants eagerly anticipating insights into the group’s cohesion. Clarity on the unity of OPEC+ and the potential need for additional efforts from major players like Saudi Arabia and Russia to sustain elevated prices may emerge during the virtual meeting scheduled for the 30th.
Despite the recent volatility in oil prices, Brent crude seems to be hovering around the $80 mark, a level that introduces complexities to decision-making. This price is considered the breakeven point for Saudi Arabia, the de facto leader of OPEC, and the nation that implemented an additional one million barrel per day output cut.
Technical analysis suggests that Brent might be forming an inverse head and shoulders pattern around the $80 level. The neckline aligns with the 200/233-day simple moving average band. A potential breakout above this level could signal a bullish trend, contingent on the group’s decision to either extend or deepen existing production cuts.
As the oil market remains on edge, market participants eagerly await the OPEC+ meeting on the 30th for crucial insights that could significantly influence the trajectory of oil prices in the coming months.