December WTI Crude Oil futures posted a two-sided trade this week as investors reacted to the traditional fundamentals and to the election of Donald Trump as president.
After a one-day reprieve due to a positive reaction to President-elect Donald Trump’s unexpected win in Tuesday’s election, oil prices fell at the end of the week as investors returned their focus to oversupply concerns, and whether OPEC will be able to reach an agreement to curtail production later this month on November 30 in Vienna.
At this time, it’s all about supply. Earlier in the week, the U.S. Energy Information Administration reported a 2.4 million-barrel build in domestic crude inventories to 485 million barrels the week-ending November 4.
OPEC meets in Vienna on November 30 for formal talks on production cuts. It has been trying to come to an agreement with non-member, including Russia, but doubts continue to linger over whether they can come to an agreement.
The tone of the market is still negative and the price action suggests a sideways to lower trend is likely until the OPEC meeting at the end of the month. Conditions could change drastically if there is any hint of a deal in the works to curtail production. Oversold technical conditions may also trigger near-term short-covering rallies.
On the negative front, the International Energy Agency (IEA) said this week the global market will remain in surplus unless OPEC can reach an agreement at its November…