Crude oil futures traders experienced high intraday volatility and a two-sided trade most of the week as expectations of an OPEC deal to limit production helped underpin the market and oversupply concerns and a strong U.S. Dollar limited the rallies.
To recap the week, January crude oil futures closed lower on November 14 after falling to their lowest levels in three months. Prices were pushed lower early in the week due to oversupply concerns. Additionally, data from the InterContinental Exchange showed investors cut their long positions by the largest weekly amount on record. This information alone made the market ripe for a turnaround.
Trading conditions changed quickly with oil prices jumping nearly 6 percent on November 15 on expectations that OPEC will agree later this month to cut production to reduce the supply glut.
Triggering the massive short-covering rally was a report from Reuters that said Saudi Energy Minister Khalid al-Falih was expected to travel to the Qatari capital, Doha, this week for meetings with oil-producing countries on the sidelines of an energy forum.
This meant that OPEC could start its official meeting on November 30 in Vienna with a structured deal to limit output in place, increasing the chances the meeting will end with a signed, sealed and delivered agreement.
More volatility and two-sided trading hit the oil market on November 16 as supporters of the OPEC deal, which represents the “future”, clashed…