Crude oil plunged, largely due to growing concerns amongst oil traders on what the outcome of the OPEC+ meeting will be.
Crude oil traders became jittery at the first trading session of the week, pushing oil prices to fall more than 1.5%.
The plunge is largely attributed to growing concerns amongst oil traders on what the OPEC+ meeting outcome will be, as some leading oil producers like Nigeria seems to be unhappy with the prevailing status quo, on the bias that it hampers its oil revenue growth.
- At the time of writing, Brent crude futures prices were down by more than 1.7% to trade at $47.35 a barrel.
- U.S. West Texas Intermediate crude futures dropped 1.62% to $44.83 a barrel.
However, both major crude oil benchmarks are still set for a gain of more than 20% in November, the highest monthly gains since May, boosted by hopes for three promising COVID-19 vaccines in curbing its spread and thus boost fuel demands.
What they are saying
Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, elaborated on expectations from the pending OPEC+ meeting by market players saying.
He said, “OPEC+ two-year-long strategic agreement aligns the group’s production silhouette with demand, while ensuring that the alliance continues to supply half of the world’s needed barrels – in line with its market share, simultaneously drawing down inventories.
“After supply-dominated price dynamics over the previous business cycle, COVID-19 containment measures have turned demand into the market’s dominant driver, and this will continue to be the case until a successful vaccine is fully rolled out around the globe.”
Price consolidation in the black fossil market remains in play at least for the near term, after a strong rise in crude prices over the past 2-3 weeks, coupled with Thanksgiving holidays observed in America, reduced trading volumes.
However, oil traders still remain constructive on oil markets recovery and crude oil stockpiles are yet to come down to normal levels.