Oil prices trade within a narrow range irrespective of the US inventories’ unexpected decline; however, a bull-flag formation may unfold in the future as crude seems to be retreating in advance of the monthly low ($80.87).
The current sequence of lower highs and lows in oil prices reflects as it remains above the weekly low of $81.30, and crude oil may try to break out of a plunging channel with the Organization of Petroleum Exporting Countries (OPEC) which is working towards the reduction of the overall production by 2 mb/d in November.
The change in OPEC’s production schedule might have a prominent influence on the oil price even as the Administration of Biden intends to release 15 million barrels from the Strategic Petroleum Reserve (SPR) set to be sent in December. This is because a critical reversal seems to be taking shape after this month’s Ministerial Meeting.
Therefore, the oil price may respond to the negative slope in the 50-Day SMA ($87.01) longer as OPEC’s most recent Monthly Oil Market Report (MOMR) cautions of slowing demand. In addition, the market is on the lookout if the organization will react to the developments from the US as new figures from the Energy Information Administration (EIA) point to high demand.