Oil prices saw some volatility as they trade sideways as market participants awaited the outcome of an OPEC+ meeting later this week.
Traders could adopt a “wait-and-see” approach ahead of the meeting, where OPEC+ is expected to extend its current output cuts until the end of the first quarter of 2025.
However, concerns over a potential surplus in supply have placed downward pressure on oil prices.
While the extension of production cuts may offer some short-term support, the broader market price action suggests a bearish outlook for global crude prices in the near to medium term, as the prospect of oversupply continues to limit any significant upside.
The outlook for oil consumption remains subdued, with China’s demand expected to peak, exacerbating the supply-demand imbalance. Saudi Arabia is also anticipated to reduce crude prices for Asian buyers, further dampening market sentiment. Meanwhile, the possibility of the U.S. Federal Reserve holding off on further rate cuts in December could weigh on oil prices. However, geopolitical tensions could add to the uncertainty surrounding global crude markets.
