Crude Oil consolidates as traders prepare for final weeks of 2024

• US markets trade with limited capacity due to the Thanksgiving aftermath on Friday.
• OPEC+ ministers will meet in person before the delayed Output Policy Meeting scheduled on Thursday. 
• The US Dollar Index retreats further, with French yields narrowing the rate gap between the US and Europe. 

Crude Oil trades in the red and loses around 1% on Friday. However, it is in a continuous tight range with traders on the sidelines awaiting the outcome of the upcoming Organization of the Petroleum Exporting Countries and its allies (OPEC+) meeting on its output policy, which has been delayed to next Thursday. Markets have already priced in a delay in production normalization to the first quarter of 2025. 

The US Dollar Index (DXY), which measures the performance of the US Dollar (USD) against a basket of currencies, eases further on Friday with only a handful of US market participants returning to markets after Thanksgiving Thursday. The weakening of the US Dollar comes with the narrowing of the yield gap between the US and Europe due to French yields spiking higher on political uncertainty. French Prime Minister Michel Barnier has until Monday to propose a severely reduced budget, or the far-right National Rally party of Marine Le Pen threatens to topple the French government if demands are unmet. 

At the time of writing, Crude Oil (WTI) trades at $68.18 and Brent Crude at $72.03.

Oil news and market movers: What to expect from OPEC+

• Saudi Aramco may reduce the official selling price of Arab Light crude by $0.70 per barrel for January sales to Asia, according to the median estimate from  Bloomberg.
• Several OPEC+ ministers will attend the meeting of the Gulf Cooperation Council in Kuwait on Sunday and discuss in person before the Output Policy Meeting scheduled for Thursday. 
• The Crude Oil market continues to face uncertainties around weather, demand, and geopolitical developments, said Charu Chanana, chief investment strategist for Saxo Markets Pte in Singapore, Bloomberg reported.  

Oil Technical Analysis: The unexpected needs to happen

Crude Oil prices are still dragging, facing selling pressure and the risk of more downsides, with a constant reminder in articles and media outlets that there is a supply glut still at hand in the Oil landscape. Markets are already pricing in a simple delay of the inevitable, that supply normalization will happen at one point. The only game-changer that could push Oil prices higher would be when OPEC+ considers deepening production cuts and/or extending them for even a year. 

On the upside, the pivotal level at $71.46 and the 100-day Simple Moving Average (SMA) at $72.13 are the two main resistances. The 200-day SMA at $76.22 is still far off, although it could be tested if tensions intensify further. In its rally towards that 200-day SMA, the pivotal level at $75.27 could still slow down any upticks. 

On the other side, traders need to look towards $67.12 - a level that held the price in May and June 2023 - to find the first support. In case that breaks, the 2024 year-to-date low emerges at $64.75, followed by $64.38, the low from 2023.

US WTI Crude Oil: Daily Chart