Oil News: Crude Prices Rise on OPEC+ Delay, Election Impact From Trump, Harris

Crude Oil Prices Edge Higher as Key Technical Levels Come into Focus

Crude oil prices are inching upward, driven by speculators building on recent gains after light crude broke above its 50-day moving average. This move has added bullish momentum, with prices now testing the 50% retracement level at $71.63. If prices break through this level, they could target the 200-day moving average at $73.13, which would signify strong buying pressure. Traders are eyeing the recent high of $77.88 as a potential upside target if the momentum continues.

At 11:42 GMT, Light Crude Oil Futures are trading $71.78, up $0.31 or +0.43%.

OPEC+ Production Delay Lends Support

In a recent decision, OPEC+ delayed its December production increase by one month, aiming to counter weak demand and growing non-OPEC supply. This delay follows a rise in OPEC’s output, spurred by Libya’s resumed production, although Iraq’s compliance with OPEC+ limits mitigated some of this increase. The production delay signals OPEC+’s commitment to stabilizing prices amid a weaker demand outlook, providing traders with support as they assess 2024 supply trends.

U.S. Presidential Election Heightens Market Uncertainty

The U.S. presidential election is creating volatility in the oil market. A Trump victory would likely bolster the domestic energy sector, promoting policies favorable to drilling, which could raise U.S. output and place downward pressure on global oil prices. Conversely, a Harris-led administration would likely favor clean energy policies, reducing domestic oil dependence and possibly tightening supply. Alongside the election, the Federal Reserve’s policy decisions this week may also impact oil through the dollar’s strength, influencing commodity prices globally.

Iranian Crude Discounts Tighten on Reduced Exports

Discounts on Iranian crude to China have tightened to their smallest margin in five years, as Iranian exports dropped by over 300,000 barrels per day in October. This reduced supply, attributed to pipeline issues and geopolitical concerns, has strained China’s independent refiners, or “teapots,” which rely on discounted oil to maintain thin margins. Geopolitical risks around Iran and potential supply disruptions are keeping premiums elevated, with traders closely monitoring developments.

Record Hedging Reflects Heightened Caution

October saw record oil futures and options trading as hedging activity surged. ICE and CME both reported peak trading volumes, driven by geopolitical tensions and a bearish outlook for 2025. Aegis Hedging noted that producers are increasingly locking in prices to manage risk in an uncertain market. As options markets see elevated activity, the focus remains on managing exposure amid market volatility.

Market Forecast: Near-Term Bullish with Caution

The near-term outlook is cautiously bullish, with technical indicators and OPEC+ actions providing support. If prices hold above current levels, they may test $77, attracting additional speculative interest. However, U.S. election results, geopolitical tensions, and Federal Reserve policies could introduce volatility, necessitating careful risk management.