Oil petroleum futures finally hit a block in their upward run. But prices start to contract this Thursday. Traders are cautiously and patiently waiting for news about OPEC’s decision, which is set to be finalized tomorrow.
West Texas Intermediate futures, or WTI crude oil, contracted by 0.48% or 0.28 points this Thursday.
WTI crude oil prices went down to $58.15 against its last close of $58.43. Prices climbed up to $58.51 in the first half but eventually fell later on through the trading.
Meanwhile, Benchmark Brent oil contract declined 0.32% or 0.20 points during this Thursday’s sessions. Brent oil barrels currently trade for $62.80, edging down from its previous close of $63.00.
Prices are almost back to where they were last week before plunging on Friday. Bulls, unfortunately for them, are struggling to push prices near the medium-term resistance.
The adrenaline of oil petroleum bulls has finally died down after three consecutive days ahead of the OPEC meeting.
Later today, the members of the Organization of the Petroleum Exporting Countries will meet at Vienna, Austria. Then tomorrow, the 14-member bloc will have a follow-up meeting with its non-OPEC allies.
Traders are holding their breath in hopes for deeper cuts from the oil petroleum organization.
OPEC+ has been curbing oil production output for two years since 2017 to counter the booming US production. The organization has struggled to balance the supply as the US rises as the world’s largest producer.
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Saudi Arabia, the de facto leader, prefers deeper cuts according to previous reports. Riyadh’s stance, however, comes ahead of the highly anticipated listing of Saudi Aramco.
For the kingdom of Saudi to have its way, it must reach a consensus agreement between other members and its allies like Russia.
Inventory Report
Just yesterday, the Energy Information Administration released its regularly scheduled report on US inventories. The EIA found a decline in US crude inventories but a buildup in gasoline stocks.
Prior to the report, experts projected a 1.7-million-barrel decrease in oil petroleum last week ending on November 29. However, US crude inventories surprisingly fell by 4.9 million barrels.
According to the agency, stockpiles in the delivery hub of Cushing, Oklahoma, fell by 302,000 barrels that week.
Meanwhile, US gasoline stocks went up by 3.4 million barrels, exceeding 1.8 million-barrel gain projections.
US distillate stockpiles, which include heating oil and diesel, increase 3.1 million barrels. The results went in more than twice on forecasts of 1.1-million-barrel increase.
Then the net US oil petroleum imports rose 144,000 barrels per day last week while the US four-week average for commercial crude imports dropped to its lowest record since 1992.
The Tariff Man Again
Another factor to today’s drop in oil petroleum prices is the escalating tensions on the protracted US-China trade war. Just recently, the former US Treasury Secretary Larry Summers clapped back on Trump’s tariffs.
According to Summers, the US President’s unconditional love for tariffs is backfiring in the United States. The former Washington official said he was not surprised at the outcome at all.
Summers credited that Trump’s tariffs are aimed to protect US workers, but he argues that the economy is suffering. And with the recent comments of the US President at the NATO gathering, things could get much worse for the United States.
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