Oil News: Ceasefire and OPEC+ Delay Prospects Steady Crude Outlook

Crude Oil Prices Steady Below Key Resistance Ahead of OPEC+ Decision

Light crude oil futures are nearly flat on Wednesday, trading just below the key Fibonacci resistance level at $69.11. This level is shaping up to be a pivotal point for traders, as a sustained move above it could drive prices higher toward the 50-day moving average at $70.18, followed by resistance near $71.51-$71.53. However, a break below $68.05 may trigger sharper downside momentum.

With U.S. markets closed on Thursday for Thanksgiving, trading volumes are expected to be light, warranting caution for those selling into weakness or buying on strength.

Market Focus: Geopolitical Ceasefire and OPEC+ Meeting

Oil markets are reacting to news of a ceasefire agreement between Israel and Hezbollah, which came into effect Wednesday after U.S. and French mediation. This development has introduced a note of stability to the geopolitical landscape, but traders remain cautious about whether the ceasefire will hold.

In the backdrop, attention is shifting toward the upcoming OPEC+ meeting on December 1. Sources indicate that the group, which controls nearly half of global oil supply, is likely to delay a planned production increase set for January. The decision to maintain current output cuts, totaling 2.2 million barrels per day, could provide price support through early 2025.

U.S. Supply Trends and Trade Risks

Data from the American Petroleum Institute (API) showed U.S. crude stocks fell by 5.94 million barrels last week, significantly exceeding expectations of a 600,000-barrel draw. Despite this, fuel inventories rose, signaling mixed demand signals.

Adding to supply uncertainty, President-elect Trump has proposed a 25% tariff on all imports from Mexico and Canada. While crude oil appears exempt, such trade policies could indirectly affect energy markets by disrupting broader trade flows.

Analysts View Oil as Undervalued

Major investment banks, including Goldman Sachs and Morgan Stanley, maintain that current oil prices are undervalued due to supply deficits and potential risks to Iranian output. They project WTI crude trading in the $65-$70 range in the short term, influenced by winter weather, shale production levels, and Chinese demand trends.

Market Forecast: Neutral-to-Bullish Outlook; $69.11 Sets the Tone

While geopolitical and supply factors have steadied prices, the market awaits confirmation from OPEC+ on extending production cuts. A decisive move above $69.11 could signal bullish momentum, with potential resistance at $70.18 and $71.53. Conversely, a drop below $68.05 would turn attention to lower support levels, but limited trading activity during the holiday week suggests muted moves until OPEC+ provides clearer guidance.

Traders should stay vigilant for news on the December 1 meeting, as it could determine whether crude oil prices strengthen into Q1 2025.

More Information in our Economic Calendar.