Upcoming OPEC Meeting Again Impacts Oil Prices, Fears Of Oversupply Intensify

Meanwhile, India supplies Europe with record oil volumes: File Image/Pixabay

Oil on Thursday incurred a fourth straight round of losses, this time on the order of about 2 percent, as the upcoming weekend meeting of the Organization of the Petroleum Exporting Countries (OPEC) kindled fears of more output being dumped onto a supposedly saturated crude market.

Brent settled down $1.24, or 1.9 percent, at $64.11 per barrel, while West Texas Intermediate settled down $1.30, or 2.1 percent, at $60.48 per barrel.

Reports that Saudi Arabia could boost production to defend market share have intensified bearish sentiment overall.

HFI Research analysts wrote in a blog post, "U.S. oil inventories will build into year-end, and more global visible inventory builds will take place; couple that with higher OPEC+ crude exports, and the end result is a persistently weaker oil market environment."

Fxstreet agreed, pointing out that, "From a technical perspective, WTI has slipped below the key $61.50 support zone that had held firm since early August…the commodity now trades beneath the 21, 50 and 100-day Simple Moving Averages (SMAs), reinforcing the bearish structure on the daily chart."

While traders anxiously awaited Sunday's OPEC meeting, in which analysts fear the cartel could agree to an output hike of as much as 500,000 barrels per day (bpd) over the next three months, they also kept an eye on developments in Gaza, with slightly more optimism.

Specifically, Hamas is reviewing the U.S.-backed Israel-Palestine 20-point peace proposal to end the war in that region, conditions of which require Hamas surrendering and disarming; should peace be achieved in Gaza, analysts say it could facilitate smooth oil and energy transit – and that any reduction in geopolitical tension could stabilize energy prices.

In other oil news on Thursday, vessel-tracking data show that India exported exported the highest-ever monthly volume of diesel to Europe in September, on the order of 9.7 to 10.4 million barrels, with lower shipping costs and a widening west-west diesel spread said https://oilprice.com/Latest-Energy-News/World-News/Indias-Diesel-Flows-to-Europe-Jump-to-All-Time-High.html  to be the main incentives for the shipments.