Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Oil Lower As OPEC Production Cut In Doubt

By ORBEXCommoditiesDec 07, 2018 07:57AM ET
Oil Lower As OPEC Production Cut In Doubt
By ORBEX   |  Dec 07, 2018 07:57AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Crude oil prices retreated this week despite the latest industry data reporting a drawdown in inventories for the first time in two months. The Energy Information Administration report this week showed that on the week ending November 30th, US crude oil stockpiles decreased by 7.3 million barrels.

The news will come as a relief to oil bulls who have been under heavy pressure over recent weeks as, prior to this reading, US crude stockpiles had been steadily gaining.

Key takeaways from the data

  • U.S. crude oil refinery inputs averaged 17.5 million barrels per day during the week ending November 30, 2018.
  • Gasoline production decreased last week, averaging 9.7 million barrels per day.
  • Distillate fuel production increased last week, averaging 5.6 million barrels per day.
  • U.S. crude oil imports averaged 7.2 million barrels per day last week, down by 943,000 barrels per day from the previous week.
  • U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 7.3 million barrels from the previous week.
  • Total products supplied over the last four-week period averaged 21.2 million barrels per day, up by 7.6% from the same period last year.

The market is keenly awaiting the outcome of the latest OPEC meeting which is currently in session. The oil cartel began talks today, aimed at agreeing on a reduction in output. Pressure has been mounting as oil prices have been cratering over recent weeks due to the massive oversupply which has swept the market. OPEC has publicly declared its desire to achieve a reduction in output alongside Russia.

The discussions being held in Vienna this week are aimed at achieving a production cut of around 1 million barrels about a day between OPEC and its allies. However, Russia has so far displayed resistance to such calls.

Reportedly, OPEC aims to cut production among its own members by around 650k barrels a day. Following six hours of talks yesterday, the Saudi Arabian energy minister Khalid Al-Falih said that he wasn’t confident that an agreement would be reached.

Al-Falih told reporters:

“Not everybody is ready to cut equally… Russia is not ready for a substantial cut.”

One of the issues facing the group’s objective is that of Iran’s contribution. As Iran is currently under US sanctions and will not agree to a production cut, other nations in the cartel are claiming that they should not have to cut production either. For now, it seems that the market is skeptical of OPEC agreeing on a production cut, reflected in the lower prices seen this week.

Technical Perspective

Oil prices are currently sitting on the 50.96 level support. Below here, the next key technical level is down at the 40.48 – 42.25 range where there are a raft of previous swing lows offering structural support as well as the completion of a large ABCD symmetry pattern. To the topside, any retest of the broken bullish trend line from 2016 lows is the main resistance.

Oil Lower As OPEC Production Cut In Doubt

Related Articles

Adam Hamilton
Gold Stocks Surge Back By Adam Hamilton - Jan 21, 2022 1

The gold miners’ stocks surged back this week, blasting higher out of early-year weakness. Those big-and-fast gains were fueled by gold’s own, which shot up without any...

Oil Lower As OPEC Production Cut In Doubt

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review

Continue with Google
Sign up with Email