Oil Prices Fall to $70 Again After OPEC Meeting and EIA Inventory

Oil prices surged more than $5 yesterday on Middle Eastern tensions, but it has reversed down now and is trading just above $70, as risks fall. The EIA crude inventory showed a sizeable buildup but that’s likely due to the hurricane, as yesterday’s private API inventories showed a drawdown, while the OPEC+ meeting didn’t produce anything new.

Over the last two weeks, crude oil prices have surged significantly, rising above $70 after falling as low as $60 in August. However, the resistance zone around $72.40-$72.50 has proven challenging for buyers, leading to a price pullback toward $70 in recent hours. Yesterday, US WTI crude gained approximately $5, pushing prices above $71. Earlier today, the rally continued toward resistance, but sellers stepped in, pulling crude prices back down to $70.60. This reflects the ongoing struggle for buyers to break through key resistance levels.

Oil Chart Daily – Buyers Fail at the 50 SMA

The bearish pressure on oil was driven by a slowing global economy and indications that Saudi Arabia is no longer aiming for $100 oil prices. However, recovery was supported by China’s monetary and fiscal stimulus efforts, including lower house mortgage rates, which helped stabilize the market.

Weekly US Crude Oil Inventory Report from the EIA

• Crude oil inventories: +3.889M barrels vs. -1.250M expected
• Gasoline inventories: +1.119M barrels vs. +450K expected
• Distillates inventories: -1.284M barrels vs. -1.400M expected
• Refinery utilization: -3.3% vs. -0.5% expected (previously -1.2%)

OPEC and Crude Production Concerns

While OPEC’s planned December production hike is still on track, its impact may be limited due to quota cuts among some members. Today, the Saudi oil minister warned that prices could fall as low as $50 per barrel if OPEC+ members fail to adhere to production limits. During an OPEC+ meeting, the group agreed to maintain their current output policy, with gradual increases starting in December.

Geopolitical Tensions and Oil Market Reactions

In the last two hours, oil prices dropped by $2, as attention shifts to the rising geopolitical tensions between Israel and Iran, with concerns over potential strikes on Iran’s oil infrastructure. All eyes are on how this situation could further impact global oil markets.

US WTI Crude Oil Live Chart

WTI