Oil News: Will OPEC+ Extend Production Cuts to Support Crude Oil Prices?

Light Crude Oil Futures Edge Higher Ahead of Key OPEC+ Meeting

Light crude oil futures traded slightly lower on Thursday, after testing the critical resistance level of $69.11. Breaking through this threshold would signal the first sign of strength, but the market still faces significant technical barriers, including key moving averages and retracement levels that may limit a near-term rally.

At 12:02 GMT, Light crude oil futures are trading $68.25, down $0.29 or -0.42%.

Rangebound Trading Expected Below Key Resistance Levels

We believe crude oil may remain rangebound in the short term, with the Fibonacci level at $69.11 and the 50% retracement at $71.53 forming the primary boundaries. Overcoming these thresholds will require sustained momentum, particularly as prices approach the 50-day moving average at $70.03 and the 200-day moving average at $73.00. These levels are critical for confirming a bullish breakout. Until then, the market could oscillate within these bands, reflecting uncertainty in the broader trading environment.

OPEC+ Decision Could Define the Market’s Next Move

The market’s attention is firmly on the outcome of Thursday’s OPEC+ meeting, where the group is expected to extend its production cuts by at least three months. This move could provide additional price support, as global demand remains subdued, particularly from China.

We think this decision presents a pivotal moment. If OPEC+ prioritizes propping up prices through extended cuts, it could set the stage for higher prices heading into year-end. However, the alternative—easing cuts to protect market share—may weigh on prices and disappoint investors.

Volatility and Inventory Data in Focus

Earlier this week, crude oil prices fell nearly 2% after a significant volume of U.S. oil futures contracts was sold, triggering a selloff. Despite this, the market received a modest lift from a larger-than-expected draw in U.S. crude inventories, which reflects tightening domestic supply. We see this as a sign that underlying fundamentals are beginning to stabilize, though market sentiment remains cautious ahead of the OPEC+ decision.

Geopolitical Tensions Add a Layer of Complexity

Geopolitical risks in the Middle East continue to influence oil market sentiment. Israel’s warnings of a possible return to war with Hezbollah raise concerns about potential supply disruptions. Additionally, U.S. diplomatic efforts to mediate in the Israel-Gaza conflict are keeping traders on edge, further complicating the near-term outlook.

Market Forecast: Cautiously Optimistic

In our view, crude oil prices have room to climb if OPEC+ extends its production cuts as anticipated. A move above $71.53 could signal renewed bullish momentum, supported by tightening inventories and seasonal demand increases. However, failure to break key technical levels or disappointing action from OPEC+ could keep prices locked in a narrow trading range below $73. For now, we maintain a cautiously optimistic outlook for crude oil.