Recap: The oil market ended the session lower following the OPEC+ decision to delay its planned output increase by three months to April 2025. The market traded mostly sideways ahead of the OPEC+ meeting as it retraced some of Wednesday’s losses in overnight trading. However, the market sold off sharply to a low of $67.98 after a source said OPEC+ agreed to delay an output increase ahead of an official announcement as the meeting was still underway. The market, however, bounced off its low and traded to a high of $69.16 following the official OPEC+ announcement. Also, a weaker U.S. dollar lent some support to the market. The market later gave up most of the day’s gains and traded in and out of positive territory during the remainder of the session. The January WTI contract settled down 24 cents at $68.30 and the Brent contract settled down 22 cents at $72.09. The product markets ended the session in negative territory, with the heating oil market settling down 1.17 cents at $2.1557 and the RB market settling down 66 points at $1.9325.
Technical Analysis: The oil market on Friday is seen remaining range bound following the market’s move seen during Thursday’s session after OPEC+’s announcement. The market will continue to look for further developments in the Middle East and the situation in Syria. The market is seen finding support at its low of $67.98, $67.28, $66.53, $66.32 and $65.74. Meanwhile, resistance is seen at $69.19, $70.15, $71.48-$71.51, $71.68, $71.87 and $72.41.
Fundamental News: On Thursday, OPEC+ has agreed to keep oil production at the current levels for the first quarter of 2025. OPEC agreed to extend the 2 million bpd and the 1.65 million bpd of cuts until the end of 2026 from the end of 2025. The gradual unwinding of 2.2 million of cuts will start from April 2025 and will last until September 2026. The group also agreed to allow the United Arab Emirates to raise output by 300,000 bpd from April and until the end of September 2026, instead of the earlier plan to start it in January 2025.
Russia’s Deputy Prime Minister Alexander Novak said that the OPEC+ group had decided to extend output cuts in order not to destabilize the global energy market, amid weaker seasonal fuel demand. He also said that the compliance with production quotas among the OPEC+ countries is high, while the global oil market is stable due to, among other things, the OPEC+ actions, adding that OPEC+ expected global oil demand to increase by 1 million bpd in 2025.
PJK/Insights Global reported that gasoline stocks in the Amsterdam-Rotterdam-Antwerp storage hub in the week ending December 5th increased by 13.57% on the week and by 9.45% on the year to 1.297 million tons, while gasoil stocks fell by 5.59% on the week but increased by 20.34% on the year to 2.13 million tons and fuel oil stocks increased by 13.13% on the week and by 7.01% on the year to 1.344 million tons. Naphtha stocks increased by 10.64% on the week and by 190.36% on the year to 572,000 tons and jet kero stocks increased by 2.15% on the week and by 39.89% on the year to 996,000 tons.
The number of Americans filing new applications for unemployment benefits increased moderately in the week ending November 30th. The Labor Department said initial claims for state unemployment benefits increased by 9,000 on the week to a seasonally adjusted 224,000.
Early Market Call – as of 8:40 AM EDT
WTI – Jan $67.65, down 65 cents
RBOB – Jan $1.9160, down 1.65 cents
HO – Jan $2.1391, down 1.66 points
