Recent factors that have affected oil prices include the Fed’s decision rate, geopolitical tensions, production delays from OPEC+ members, production increases from non-OPEC+ members, and China’s demand, which has dampened oil prices.
Oil prices have experienced fluctuations due to these developments. Recently, prices remained steady as the market awaited potential interest rate decisions by the Fed and evaluated the implications of intensified sanctions on Russia.
China’s decelerating economy is significantly impacting global oil demand. Projections indicate minimal growth in China’s oil demand for 2024 and 2025, a sharp change from prior years. This slowdown is partly due to the surge in electric vehicle adoption, with EVs now accounting for over half of China’s auto sales, leading to a decline in gasoline consumption.
The possibility of increased U.S. oil production, especially under a Trump administration, is causing concern among OPEC+ members. Proposed deregulation could boost U.S. output, potentially reducing OPEC+’s market share and complicating efforts to maintain oil prices. However, experts suggest that significant increases in U.S. production may not materialize quickly due to economic feasibility and development timelines for new oil fields.
OPEC+ has recently delayed plans to increase output and extended supply cuts until 2026 to stabilize the market. In October, Saudi Arabia’s crude oil exports rose to a four-month high of 5.925 million barrels per day, despite a slight decrease in overall production. These strategic decisions aim to balance supply and demand dynamics amid global economic uncertainties.
The current and future state of the global oil market is greatly influenced by the interaction of OPEC+’s production strategies, possible changes in U.S. oil policy, and China’s economic trends. In order to effectively navigate the changing market dynamics, traders should monitor these factors.
Technical Analysis
Source: TradingView
Price re-established its bullish trend after it moved back above $69.8 (pivot point) and above all 3 EMAs.
If buyers maintain momentum and drive the price above $71, traders will be watching the zone around $72.4 as resistance.
In a bearish scenario where price fails to sustain its gains, it could drop below the pivot point level, now acting as support. Further price movement will depend on market dynamics.
