Oil Price Update: OPEC Delays Meeting and EIA Storage Data Rises Again

Oil Price Update: OPEC Delays Meeting as EIA Storage Data Rises Again

Oil (Brent, WTI) News and Analysis

Increasing stock levels have kept Brent and WTI crude oil prices suppressed, according to EIA storage figures. Brent crude recently experienced a short-lived pullback and failed to surpass the 200 SMA. Meanwhile, WTI has revealed a bearish formation (evening star) at a notable level of resistance. The analysis in this article utilizes chart patterns and key support and resistance levels. For more information, visit the comprehensive education library.

EIA Storage Figures Reveal Increasing Stock Levels – Keeping Prices Suppressed

The Energy Information Administration (EIA) recently released storage figures which revealed another significant build in stock levels at Cushing, even after last week’s double dose of rising stock levels. This news has contributed to the ongoing slide in oil prices.

The pessimistic economic outlook, following weak data in Europe and China, has led forward-looking markets to price in lower oil demand if the global economy is set to contract in the coming months and quarters. This data has caused oil prices to continue to drop since the notable turn in fundamental data in the US.

OPEC and its allies, known as OPEC+, were scheduled to reconvene on Saturday amid rising speculation of extended supply cuts which typically result in rising oil prices. However, the meeting has now been delayed to November 30th, with analysts pointing to potentially differing views in the group as the reason for the delay.

Today’s price action tested the crucial 200-day simple moving average (SMA) before heading lower. The 200 SMA roughly coincides with the $82 level, which is a prior pivot point for the commodity. The next level of support appears via the 50% Fibonacci retracement of the broader 2020 to 2022 move at $77 before the $71.50 level comes into focus. Resistance remains back at the 200 SMA.

The WTI chart portrays the same rejection of the 200 SMA, just above the significant long-term level of $77.40. Support is at the prior swing low at $72.50, followed by $67 – which is the lower level identified by the Biden administration to replenish SPR storage. The formation of an evening star adds to the bearish sentiment and even though it appears within a mature trend, revealed a notable rejection at the 200 SMA.

The monthly chart of WTI helps to isolate the significant long-term level of $77.40, a level that has provided multiple major reversals/pivot points in the past.

In summary, the EIA’s storage figures reveal increasing stock levels, which are keeping prices suppressed. The pessimistic economic outlook has contributed to lower oil demand, causing prices to continue to drop. The delayed OPEC+ meeting has also added to the bearish sentiment in the market. The rejection of the 200 SMA and significant long-term levels of $77.40 provide key support and resistance levels to watch in the coming weeks.

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