OPEC Expected To Cut Output, Russia To Follow?
Today’s Spotlight Market
Crude Oil futures continue to trade sideways this holiday week, amid a flurry of speculation and lack of hard data. OPEC leaders meet later this week, resulting in many traders remaining on the sidelines until the cartel shows its hand. There is also much speculation as to what Russia will do after OPEC decides what its targets will be. There is a lot of buzz, which seems to have picked up, that Russia could trim its production with the cartel to bolster Oil prices. The Russian economy has certainly suffered major setbacks amid slumping petroleum prices. ?
Fundamentals
It is widely expected that OPEC will curb its production quota to 29 million barrels a day in an effort to bolster prices. It is one thing to agree to the quota and another to actually follow through. The group’s target had been 30 million barrels a day, but private estimates suggest member states had pumped 30.97 million barrels in October. This was the fifth consecutive month that the cumulative output outpaced the quota. If member nations do indeed agree to trim production later this week, traders may expect actual output to be closer to the quota of 30 million barrels. It will be interesting to see what, if any, impact a cut would have on US Oil prices. The US continues to pump more Oil, reaching 3 decade highs.
Technical Notes? -? View Today’s Chart
Turning to the chart, we see the January Crude Oil contract trading sideways above the $75 level.? This is a fairly significant support level for the Oil market and failure to hold $75 could result in a test of the $70 mark.? The RSI has recovered from oversold territory and is now showing a neutral reading.? Prices have tested the 20-day moving average in recent sessions, but have failed to move above the average.? A solid close above the average could suggest that a near-term low is in place.
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