Large Price Swings Ahead Of Thursday’s OPEC Meeting

Oil prices had a roller coaster ride on Wednesday. Falling around 2.5% and then rebounding almost 3% following reports that delegates told the WSJ that OPEC+ is considering deepening its output cuts by up to 1mbd at Thursday’s meeting. There has been a lot of uncertainty over what the group will decide given internal divisions. Dovish Fed comments also provided support. The USD index fell 0.1%.

• Brent fell below $81 earlier to an intraday low of $80.72/bbl. It then rebounded to a high of $82.99. It is 1.4% higher on the day at $82.65. But the bearish theme remains and gains are corrective. Initial support is at $76.71, November 16 low, and key short-term resistance is at $83.62, November 14 high.
• WTI is up 1.7% to $77.70/bbl. It fell to a low of $75.67 before rising above resistance to $78.09. A break of $72.37, November 16 low, would confirm the resumption of the downtrend. Key short-term resistance is at $79.65, November 14 high.
• Higher EIA-reported US crude inventories didn’t pressure the market. Crude stocks rose 1.6mn barrels to their highest level since July. Gasoline rose 1.76mn and distillates +5.22mn. Refinery utilisation increased 2.8pp. US output was unchanged.
• See the MNI Commodity Weekly here.