OPEC+ members appear to have fallen short of meeting existing production increases. A Reuters survey published Monday found that members of OPEC pumped 27.5 million barrels a day in October. That’s up just 190,000 barrels a day from the previous month and short of the 254,000 barrel-a-day rise permitted under the current OPEC+ agreement. Still, “Saudi Arabia and Iraq do have the capacity to raise output,” the analysts at Zaner said.
West Texas Intermediate crude for December delivery fell 14 cents, or 0.2%, to settle at $83.91 a barrel on the New York Mercantile Exchange after posting gains in each of the previous three sessions. The U.S. benchmark traded at a seven-year high last week. January Brent crude the global benchmark, added a penny to settle at $84.72 a barrel on ICE Futures Europe.
“Despite growing pressure from the major oil consuming countries — following the lead of the U.S. and India, Japan is now also calling for oil production to be expanded to a greater extent — OPEC+ has so far shown no signs that it is willing to do so,” said Carsten Fritsch, analyst at Commerzbank, in a note. OPEC+ is scheduled to meet Thursday. The group had previously agreed to unwind production cuts it put in place as a result of the COVID-19 pandemic, lifting output in monthly increments of 400,000 barrels a day.
“Crude oil remains in an uptrend. The next key levels to watch for support [for WTI] are the 50-week moving average ($64.12), followed by the recent low ($62.05) and the 200-week moving average ($56.65),” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute in a note (see chart below). “Resistance will likely be found at psychologically-important round numbers ($90, $100) until we get to the 2014 high ($107.95).”
Weekly data on U.S. petroleum supplies will be released by the Energy Information Administration on Wednesday. The American Petroleum Institute, a trade group, will release its own report late Tuesday.
On average, analysts expect the EIA to report a climb of 300,000 barrels for crude inventories as of Oct. 29, according to a survey conducted by S&P Global Platts. They also forecast weekly supply declines of 900,000 barrels for gasoline and 1.5 million barrels for distillates.
