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Light crude oil futures are on track to finish the week lower after failing to confirm a recent closing price reversal bottom for the second time. As of Thursday’s close, the market is trading at $59.70, down $1.28 or -2.10%. With one session remaining, traders remain focused on the fundamental backdrop, which continues to tilt bearish. OPEC+ Output Strategy Fails to Convince Market OPEC+ attempted to stabilize prices by confirming a modest 137,000 barrels per day (bpd) increase in December and signaling a pause on further production hikes in early 2025. While the move was designed to address oversupply concerns, it fell flat with traders. The pause was seen less as proactive supply management and more as a reluctant admission of the growing surplus expected in early 2025. Saudi Arabia’s pricing strategy added to the downbeat mood. The kingdom cut its official selling prices for December deliveries to Asia, signaling weak regional demand and reinforcing the message of a well-supplied global market. The price reduction is widely interpreted as a competitive response to eroding refinery margins and sluggish buying interest among key Asian importers. U.S. Production and Inventories Add to Bearish Sentiment Adding to the supply-heavy tone, U.S. crude production remains elevated. The Energy Information Administration (EIA) confirmed that U.S. output reached a record 13.8 million bpd in August, extending a months-long streak of strong production that… Light crude oil futures are on track to finish the week lower after failing to confirm a recent closing price reversal bottom for the second time. As of Thursday’s close, the market is trading at $59.70, down $1.28 or -2.10%. With one session remaining, traders remain focused on the fundamental backdrop, which continues to tilt bearish. OPEC+ Output Strategy Fails to Convince Market OPEC+ attempted to stabilize prices by confirming a modest 137,000 barrels per day (bpd) increase in December and signaling a pause on further production hikes in early 2025. While the move was designed to address oversupply concerns, it fell flat with traders. The pause was seen less as proactive supply management and more as a reluctant admission of the growing surplus expected in early 2025. Saudi Arabia’s pricing strategy added to the downbeat mood. The kingdom cut its official selling prices for December deliveries to Asia, signaling weak regional demand and reinforcing the message of a well-supplied global market. The price reduction is widely interpreted as a competitive response to eroding refinery margins and sluggish buying interest among key Asian importers. U.S. Production and Inventories Add to Bearish Sentiment Adding to the supply-heavy tone, U.S. crude production remains elevated. The Energy Information Administration (EIA) confirmed that U.S. output reached a record 13.8 million bpd in August, extending a months-long streak of strong production that continues to offset geopolitical disruptions and OPEC+ restraint. Inventory data compounded the pressure. The EIA reported a 5.2 million barrel build in U.S. crude stocks last week, lifting total inventories to 421.2 million barrels. This followed API’s earlier report of a surprise 6.52 million barrel build, which caught many in the market off guard. While sharp drawdowns in gasoline (-5.65 million barrels) and distillates (-2.46 million barrels) provided a degree of support, the underlying crude build underscores the fragility of the market’s supply-demand balance. UBS analyst Giovanni Staunovo noted that refined product strength helped offset the bearish crude number, but emphasized that demand-side indicators still need to firm up to justify a sustained recovery. Global Demand Fading Across Key Markets Demand weakness remains a central concern. JPMorgan revised its 2024 global oil demand growth forecast to 850,000 bpd from 900,000 bpd previously, citing disappointing trends in travel and freight. In the U.S., high-frequency data points to subdued gasoline consumption and lower shipping activity. China’s manufacturing sector contracted for a seventh straight month in October, while Japan’s PMI data showed its sharpest contraction in over 18 months, led by declines in exports tied to automotive and technology goods. These data points suggest that industrial and consumer demand are weakening at a time when supply remains robust, increasing the likelihood that inventories will continue to build unless corrective action is taken. Dollar Strength Caps Upside Momentum The broader economic environment adds further headwinds. The U.S. dollar strengthened to near a three-month high as traders trimmed expectations for a December Fed rate cut. A stronger dollar tends to weigh on oil by making it more expensive for foreign buyers—an effect that’s especially pronounced during periods of sluggish global growth. Russian Sanctions: More Noise Than Impact Sanctions imposed two weeks ago on Russia’s largest oil producers, including Lukoil and Rosneft, have not meaningfully tightened supply. While disruptions to international operations have been reported, traders remain skeptical. Jorge Montepeque of Onyx Capital remarked that the market "still needs to be convinced there will be an impact." Until disruptions are reflected in physical supply data, the market is unlikely to price in a meaningful premium. Fundamental Forecast: Bearish Bias Carries Into Friday With one trading day remaining, crude oil remains fundamentally pressured. A combination of high U.S. output, rising inventories, weak global demand, and a stronger dollar continues to cap any bullish momentum. While refined product drawdowns and geopolitical risk provide some counterbalance, they have yet to meaningfully shift sentiment. Unless Friday brings a surprise catalyst—such as a shock inventory revision or a sudden disruption—market conditions point toward a bearish continuation into next week. Weekly Light Crude Oil Futures Trend Indicator Analysis Light crude oil futures are on track to finish the week lower after failing to confirm a recent closing price reversal bottom for the second time. As of Thursday’s close, the market is trading at $59.70, down $1.28 or -2.10%. On the upside, the first major resistance comes in at the 52-week moving average at $62.24. Two minor resistance levels follow at $62.50 and $62.59. A close above $62.59 would confirm the reversal bottom, but bulls would still need to clear the long-term pivot at $63.74. That level is seen as a potential trigger for an upside breakout, targeting $65.95 as the next objective. However, the inability to break above the 52-week moving average for a third consecutive week suggests that bearish traders are defending the level aggressively. This has opened the door for a fresh retest of the 61.8% retracement support at $59.44. A decisive move below this Fibonacci level could accelerate selling pressure down toward $55.96. From a trend analysis perspective, the 52-week moving average remains the key indicator to watch. With prices expected to close the week below this level, the short-term trend remains bearish heading into Friday’s session. Momentum will likely hinge on the market’s reaction to the key 61.8% retracement support. Weekly Technical Forecast The direction of the weekly Light Crude Oil Futures market for the week ending November 14 is likely to be determined by trader reaction to the 61.8% retracement level at $59.44. Bullish Scenario A sustained move above the Fibonacci level at $59.44 will signal renewed buying interest. If this move generates sufficient upside momentum, a retest of the 52-week moving average at $62.24 could follow. Bearish Scenario A sustained move below the Fibonacci level at $59.44 will indicate active selling pressure. This could trigger a sharp decline toward $55.96, with potential for an extended move down to $55.27 or lower. Weekly Forecast: Bearish Bias Holds as Key Support Level in Focus With one trading day remaining, crude oil remains fundamentally pressured. A combination of high U.S. output, rising inventories, weak global demand, and a stronger dollar continues to cap any bullish momentum. While refined product drawdowns and geopolitical risk provide some counterbalance, they have yet to meaningfully shift sentiment. Unless Friday brings a surprise catalyst—such as a shock inventory revision or a sudden disruption—market conditions point toward a bearish continuation into next week. Technically, a second consecutive close below the 52-week moving average confirms short-term trend weakness. The 61.8% retracement level at $59.44 remains the key pivot; holding above it could stabilize prices, while a sustained break below opens the door to deeper losses.
