Oil forecast: WTI steadies for now, OPEC+ postpones meeting

Oil steadies after 3-days of losses
Easing tensions in the Middle East reduced the risk premium
OPEC+ postpones Dec 1st meeting
Oil trades in holding pattern

Oil prices held steady on Thursday, ending three days of losses, after OPEC+ announced that it had delayed its upcoming meeting to the following week.

Crude oil fell at the start of the week after Israel and Lebanon agreed to a ceasefire deal. While this removes some of the risk premium from oil, reflected by the 3.5% decline on Monday, Israel is keeping up its offensive in Gaza, which means stability in the Middle East remains elusive.

The market is now turning its attention to the OPEC+ meeting, which had originally been planned for December 1st but has now been postponed. The group is expected to push back plans to start unwinding production cuts amid concerns over weaker demand and high supply from non-OPEC countries. Such a move could help steady oil prices. However, the IEA cut its oil price forecast for 2025, regardless of whether OPEC unwinds output cuts.

China has been a key area of concern for OPEC as the world's largest oil importer struggles with a sluggish economy and weak economic outlook despite recent stimulus measures.

Furthermore, China's economic outlook is increasingly uncertain amid expectations that Trump will impose trade tariffs when he takes office in January. The Chinese economy is more fragile than it was under the first Trump administration, so it will be less resilient to tariffs. Weaker growth in China could hurt the demand outlook for oil.

On the data front, U.S. oil inventories fell, but gasoline stockpiles rose. EIA government data showed oil inventories shrank by 1.8 million barrels in the week ending November 22nd; however, gasoline inventories increased by 3.3 million barrels.

Looking ahead trading volumes are likely to remain low as the US markets return for half a day tomorrow.

Where next for oil prices?

Oil prices continue to trade within a familiar channel, capped on the upside by 71.50-72.50 resistance and by 67.50 on the downside. The RSI is neutral.

For a break-out trade, buyers will look to rise above 71.50 to 72.50 to create a higher high and bring the 75.00 round number into focus.

Sellers will look to break out below 67.50 to bring 65.25, the September low, into focus.

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