The OPEC+ meeting that was scheduled to take place this weekend was postponed after disagreements from some of the African nations regarding the cartels production quotas. OPEC’s African members Angola and Nigeria have reportedly asked to have a higher production ceiling next year, after taking a cut in their quotas at the June 2023 meeting of OPEC+ as they had consistently failed to pump to their quotas. Additionally, Angola, Congo and Nigeria were forced to commit to lower oil production next year, and this weekend’s meeting could potentially have pressured them to make further production cuts. The Saudis have reportedly expressed discontent over compliance with the deal as it shoulders the bulk of the quota burden. We will keep a close eye on the developments of the negotiations and how it will affect oil prices in the 1Q2024. Most sources are expecting Saudi Arabia, OPEC’s largest oil producer, to extend its voluntary cut of 1 million barrels per day (bpd) into 2024, considering the latest slide in oil prices to $80 per barrel and the typically weak period for oil demand in the first quarter of every year.
Brent crude has fallen roughly 15% since the start of October and it is ow tethering around the 200-day MA price of $82 per barrel. The critical level to watch is the 61.8% Fibo retracement level of $80 per barrel. A break below this level will see crude drop back down to $72 per barrel. It will however be a bullish sign if it can hold levels above $80 pb as it will confirm an end to the ABC corrective pattern and the start of another 5-wave impulse which could push crude to above $100 pb.
Brent crude has fallen roughly 15% since the start of October and it is ow tethering around the 200-day MA price of $82 per barrel. The critical level to watch is the 61.8% Fibo retracement level of $80 per barrel. A break below this level will see crude drop back down to $72 per barrel. It will however be a bullish sign if it can hold levels above $80 pb as it will confirm an end to the ABC corrective pattern and the start of another 5-wave impulse which could push crude to above $100 pb.