Oil price today fell abruptly earlier after Angola announced its withdrawal from OPEC. “The decision, duly studied, was taken at a meeting of the Council of Ministers under the guidance of President João Lourenço,” said the Angolan oil minister.
The fear is that this could be a crack in OPEC’s dam and the first step towards the cartel’s disintegration, something that could lead to the release of 4 million barrels of oil per day into the market and raise prices to $30. Angola is a reasonably sized oil producer, producing about 1.1 million barrels per day. However, it is unclear why they chose such a big battle with OPEC because they could not maintain production for years.
The tension began in June when Angola was given a cut in its 2024 production target to 1.28 million bpd, down 175,000 bpd from its 2023 target. It was cut again at the last meeting to 1.08 million barrels per day. Angola wanted 1.18 million barrels per day and the dispute was clearly enough to leave OPEC.
The prospect of producing another 50,000 barrels per day this year is not important to the global oil market, but the likelihood of further disintegration is certainly higher now, which is why the price of oil has fallen by $1.50.
The United States has cemented its position as the world’s largest oil producer, with daily production increasing by 200,000 barrels last week to the highest level in data dating back to 1983, according to the Energy Information Administration. Crude oil inventories rose nationwide for the first time in three weeks.
It has become starkly clear that the forecast for faltering growth in US shale production after the Covid-19 pandemic has been misplaced
Oil price today volatile and the impact of interest cut expectations and trade tensions
Oil Price Today West Texas Intermediate (WTI), the NYMEX futures futures, is falling after failing to rise above the spot resistance level of $75.00. The broader appeal of the oil price is optimistic as policymakers at the Federal Reserve are expected to dismantle their hawkish stance on interest rates soon.
In addition to deepening expectations of a rate cut by the Fed, trade problems near the Red Sea are expected to keep oil supplies limited.
The price of oil continues to find orders despite a sudden jump in crude oil inventories by 2.9 million barrels for the week ended December 15. Conversely, investors expected oil inventories to fall by 2.3 million barrels.
WTI recovered strongly after buying interest was discovered near $68.00 after forming a bullish divergence. While oil prices have consistently been forming peaks below their lows, the Relative Strength Index (RSI) (14) formed a higher bottom, showing an end to the downward momentum.
The asset confidently maintains above its 50-period exponential moving average (EMA), suggesting that the near-term trend has shifted to the upside.
The price of oil may bring big offers after a crucial breakout above Wednesday’s high of $75.00, which will push the asset towards the November 30 high of $79.63, followed by the November 6 high near $82.00.
In an alternative scenario, a breakdown below the December 13 low of $68.00 would expose the asset to an eight-month low near $66.88, the March 24 low. Further collapse will pull the asset to a May low near $64.30.
Oil price today accelerates ahead of holidays amid anticipation of oversupply
Oil price today is falling as the WTI crude market of $73.392-0.092 (-0.13%) showed a great deal of volatility during Thursday’s trading session as traders continued to rank their positions ahead of the holidays. We recently tested the $75 level, but it seems that we are selling from that area, which makes some sense because it was a previous support, and a certain amount of “market memory” can appear in the picture.
Brent USD 78.872 -0.077 (-0.10%) Trading with FXTM 82% of retail CFD accounts lose money
Markets were also very noisy during Thursday’s session, initially trying to break above the $80 level before turning and showing signs of negative. With all factors neutralized, I think you still see in this scenario a lot of noisy behavior ahead of the holidays, and the lack of liquidity will be a major problem for at least a week. For this reason, I won’t rely too much on the move, other than that we may have gotten some short cover over the last few days until Wednesday.
If we shift and break above the 50-day moving average, the market could head towards the 200-day moving average, an indicator that obviously attracts a lot of attention. If we break above the level, it may obviously change the overall trend. But for now, markets seem to believe that there is an oversupply of crude oil, so we are likely to continue to see the pressure, and of course it is very difficult to trade in the holiday season. Obviously, Monday is Christmas, and this will lead to a rebound in the markets, but it is very rare for a lot of big traders to come and start pushing the markets between Christmas and New Year as well.
Oil price today affects Angola’s withdrawal from OPEC and escalating tensions
Oil price today fell after a three-day lead, as traders weighed rising US production in the face of the ongoing threat of Houthi attacks on ships in the Red Sea.
Global benchmark Brent crude fell 1.8 percent to trade below $79 a barrel as sentiment deteriorated after Angola announced it was leaving the Organization of the Petroleum Exporting Countries. US crude production hit a record 13.3 million barrels per day (bpd) last week, according to government data. Meanwhile, the Iran-backed militant group has warned that it will retaliate if the United States carries out attacks on its bases in Yemen.
Angola’s departure will reduce OPEC’s membership to 12 countries. The government in Luanda rejected the reduced production limit imposed by cartel leaders to reflect the country’s dwindling oil production capacity. The state-owned newspaper Journal de Angola reported the decision, citing Mineral Resources Minister Diamantino Azevêdo.
The price of crude oil rose earlier this week as escalating Red Sea attacks prompted shipping companies to divert ships away from the main energy corridor. Oil remains headed for its first annual decline since 2020, as booming production from the United States, Guyana and Brazil offset production cuts by Saudi Arabia and OPEC+.
The United States has cemented its position as the world’s largest oil producer, with daily production increasing by 200,000 barrels last week to the highest level in data dating back to 1983, according to the Energy Information Administration. Crude oil inventories nationwide also rose for the first time in three weeks.
Oil demand this year is increasing by about +2.5 million barrels of oil per day year-on-year by 2.3% and next year the figure will exceed +0.7 million barrels of oil per day.
Bearish Direction in Oil Prices as Moving Averages Break Out
Oil price is trading at $73.13 per barrel and current technical analysis points to a downtrend in oil prices. It crossed moving averages and the MACD indicator points to a weakness in buying power..
