Crude steadies

27 nov

Crude prices were steadier in early trade this morning. This follows on from the hefty pullback seen so far this week which took front-month WTI down below $68 yesterday morning from over $71 early on Monday. The pullback came on hopes of a ceasefire deal between Israel and Hezbollah in Lebanon. This was confirmed yesterday, and came into force this morning. But it is worth noting that hostilities in this area have had no impact on global oil supply, so the sell-off was also technical to some extent. A look at the crude chart shows the steady downside pressure on prices since June 2022. This was when front-month WTI retested the highs from three months earlier when oil topped $120 per barrel following Russia’s invasion of Ukraine. Since then, crude has made a series of lower highs, with the last attempt at an upside breakout topping at $84. Yet there doesn’t appear to be much downside from current levels, as selling pressure seems to exhaust itself once prices get down to $65 or thereabouts. Traders will be wary of being overexposed ahead of tomorrow’s Thanksgiving holiday, particularly given the OPEC+ meeting on Sunday. The group will have to update the market over where it goes on maintaining current output cuts.