Oil Prices Keep Making Lower Highs, But the Support at $66-67 Still Holds

Oil prices have been making lower highs since peaking in April, however, falling below $70 again this week but the support zone at $66-67 holds. The world economy is weak currently and Donald Trump is supportive of higher crude production in the US, which has been a factor for the declining Oil prices recently.

Earlier this month, crude oil prices saw a rebound from their yearly lows in late October, largely due to speculation that OPEC might delay its planned production increases, which eased concerns about oversupply. As expected, OPEC did delay its output boost, leading to a temporary $3 rise in oil prices. However, this uptick was short-lived, with prices now pulling back below $70, suggesting a continuing trend of lower highs.

Donald Trump’s policies are likely to impact the oil industry in a bearish manner. He has expressed intentions to resolve conflicts in the Middle East, which could reduce the geopolitical risk premium factored into oil prices. Additionally, his support for increasing U.S. oil production adds downward pressure. On the global stage, potential penalties on the EU and China under his administration could further strain these major economies, potentially curbing oil demand.

WTI Oil Chart Daily – Sellers Looking to Push Down to $65

For U.S. WTI crude to test lower price targets around $65 and potentially $60, it would need to break below the support zone at $66–$67. Adding to this outlook, OPEC’s recent monthly report forecasted a further slowdown in global oil demand, reinforcing the bearish sentiment in the market.

Highlights from the OPEC Monthly Oil Report

• 2024 Global Oil Demand Forecast Reduced

  • OPEC has lowered its 2024 global oil demand growth estimate to 1.82 million barrels per day (BPD), down from the previous forecast of 1.93 million BPD.
  • This revision reflects a cautious outlook on global economic growth and oil consumption, considering various geopolitical and economic factors.

• 2025 Global Oil Demand Forecast Also Trimmed

  • For 2025, OPEC has cut its demand growth forecast to 1.54 million BPD, revised from 1.64 million BPD.
  • This further adjustment signals concerns over slowing demand in developed markets, potentially impacted by energy transition efforts and economic uncertainties.

• OPEC Production Levels

  • OPEC reports that its crude oil production in October 2024 averaged 26.53 million BPD, an increase of 466,000 BPD from September’s figures.
  • The increase was largely driven by higher production from Libya, contributing significantly to the month-over-month production gains.

With downward revisions in demand forecasts, OPEC’s report highlights a cautious perspective on future oil market dynamics. Higher production levels in October and slower demand growth projections suggest potential challenges in balancing supply and demand, which could impact oil price stability in the coming years.

US WTI Crude Oil Live Chart