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OIL: Crude Down Moderately After Rising Strongly Last Week

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Oil prices are down moderately during APAC trading today after rising around 6% last week driven by geopolitical developments. Profit-taking seems to be driving today’s move. Brent is down 0.4% to $74.89/bbl after a low of $74.79, and WTI is also 0.4% lower at $70.94/bbl following a drop to $70.83. The softer greenback hasn’t been able to support dollar-denominated crude (USD index -0.5%).

  • A crude surplus is widely expected in 2025 and markets will likely focus on that again if geopolitics move to the background. OPEC has already delayed the start of its output normalisation twice and currently the gradual increase in supply is due to start at the end of December. The group meets on December 1 and many are expecting the reduction in output cuts to be pushed out into 2025.
  • Iran declared that it will increase its nuclear fuel-making capability after being reproached by the International Atomic Energy Agency. Talks with Europe are scheduled to begin later this week. Stricter sanctions against Iran, including more diligent enforcement of current ones, under the Trump administration are expected which could reduce global supply by around 1mbd.
  • The conflict between Russia and Ukraine also risks Russian oil infrastructure.
  • Later the German November IFO survey, US October Chicago and Dallas November Fed indices print. The ECB’s Lane, BoE’s Lombardelli and Dhingra speak. 
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Oil prices are down moderately during APAC trading today after rising around 6% last week driven by geopolitical developments. Profit-taking seems to be driving today’s move. Brent is down 0.4% to $74.89/bbl after a low of $74.79, and WTI is also 0.4% lower at $70.94/bbl following a drop to $70.83. The softer greenback hasn’t been able to support dollar-denominated crude (USD index -0.5%).

  • A crude surplus is widely expected in 2025 and markets will likely focus on that again if geopolitics move to the background. OPEC has already delayed the start of its output normalisation twice and currently the gradual increase in supply is due to start at the end of December. The group meets on December 1 and many are expecting the reduction in output cuts to be pushed out into 2025.
  • Iran declared that it will increase its nuclear fuel-making capability after being reproached by the International Atomic Energy Agency. Talks with Europe are scheduled to begin later this week. Stricter sanctions against Iran, including more diligent enforcement of current ones, under the Trump administration are expected which could reduce global supply by around 1mbd.
  • The conflict between Russia and Ukraine also risks Russian oil infrastructure.
  • Later the German November IFO survey, US October Chicago and Dallas November Fed indices print. The ECB’s Lane, BoE’s Lombardelli and Dhingra speak.