After a slight downturn hitting as low as $68 WTI Crude is slowly climbing back up. The price of Brent Crude is showing similar signs and hanging around $72.22. On the contrary Opec Basket continues to fall since its highest point of $74.43 back in November. At the time of writing Opec Basket has lost 1.56%, hovering around $71.8.
Tensions have started to mount as the OPEC+ Iranian official pointed towards the organization for the low price of crude oil. He stated that OPEC+ cubed the production rate. In turn this enabled the competitors to catch up and capture the rising demand for oil. The main benefactor was the USA with its extensive drilling initiatives taken in search of oil.
In the upcoming OPEC+ meeting there will be extensive discussion on supply issues. Decisions about curbing production or increasing it will take place during the supply meeting. So the fate of the oil market for 2025 depends largely on the meeting. But what is likely to happen is a production curtail for a month. This can edge on to the next three months, stated by the Chief analyst of A/S Global Risk Management.
As disagreements among the OPEC+ members on policies start to get heated, there is little hope for a revival of an upturn. If the disagreements continue, we will see the price moving in a downward slope.
The 100 day simple moving average is around $72. This gives a resistance to the price drop. While the 200 day average is way more around $76. So it is highly likely the price will fluctuate within the price range. Traders are also keeping an eye on price from 2023 when it was $63.
Whether OPEC+ will cut the planned 2.2 million barrels a day of production in January remains in the air until the meeting takes place. The ceasefire between Hezbollah and Israel will also impact the market as tension simmers down just a little bit.