04 Nov 2024

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WTI prices have increased following the OPEC+ group's decision to postpone the anticipated output increase.

The OPEC+ alliance has also prolonged its production reduction of 2.2 million barrels per day until the conclusion of December 2024.

Market participants are closely monitoring the forthcoming US presidential election and the Federal Reserve's policy announcement scheduled for this week.

West Texas Intermediate (WTI) crude oil prices rose by over 1% on Monday, reaching approximately $70.20 per barrel during the Asian trading session. This recent uptick in crude oil prices is primarily due to the postponement of a planned increase in output by the OPEC+ coalition, which comprises the Organization of the Petroleum Exporting Countries and its allies, including Russia.

On Sunday, the OPEC+ group decided to prolong its production cut of 2.2 million barrels per day (bpd) until the end of December 2024, citing weak demand and an increase in supply from outside the coalition. Furthermore, the member nations reiterated their dedication to "achieve full conformity" with production targets and to address any overproduction by September 2025.

Traders are attentively monitoring the forthcoming US presidential election scheduled for Tuesday, as recent polls reveal a competitive race between Democratic candidate Kamala Harris and Republican nominee Donald Trump in seven key battleground states, as reported by the final New York Times/Siena College poll referenced by Reuters.

The survey indicates that Vice President Harris holds slight leads in Nevada, North Carolina, and Wisconsin, while former President Trump enjoys a narrow edge in Arizona. The candidates are virtually tied in Michigan, Georgia, and Pennsylvania. Conducted from October 24 to November 2, the poll indicates that all matchups are within a 3.5% margin of error.

In addition to the election, traders are also concentrating on the impending decision by the US Federal Reserve (Fed) regarding monetary policy, with anticipations of a modest 25 basis point rate cut this week. The CME FedWatch Tool currently indicates a 99.6% likelihood of a quarter-point reduction by the Fed in November.

Meanwhile, in China, the Standing Committee of the National People's Congress is convening from November 4 to 8, during which it is anticipated to endorse further stimulus measures aimed at supporting the slowing economy. Any such measures could positively influence oil prices, considering that China is the largest oil importer globally.