On Monday (November 4th) during the European trading session, WTI crude oil rose to $71.73 per barrel, an increase of 3.22%.

OPEC+delays production increase plan

Last weekend, the Organization of the Petroleum Exporting Countries (OPEC+) announced a one month delay in its planned production increase due to weak demand and recent price declines, with oil prices rising by over 2%. The initial plan was to increase daily production by 180000 barrels in December, but a coalition including the Organization of the Petroleum Exporting Countries (OPEC), Russia, and other allies chose to extend the current reduction of 2.2 million barrels per day until December. This production limit has been extended since October last year to support prices.

Giovanni Staunovo, an analyst at UBS, said that OPEC+hopes to see clearer signs of economic recovery. "The organization is waiting for the effects of recent US interest rate cuts and China's economic stimulus measures." He added that OPEC+has also considered potential political changes, as the US presidential election may change economic policies, and oil producing countries that previously exceeded their quotas are expected to reduce production.

Geopolitical tensions and future major events

Last week, Brent crude oil and West Texas Intermediate (WTI) crude oil prices fell by 4% and 3%, respectively, due to record production in the United States. However, oil prices were supported later on Friday after reports that Iran may retaliate against Israel. Axios' message shows that Israeli intelligence agencies believe Iran may soon launch an attack from Iraq, bringing additional geopolitical uncertainty to the energy market.

The US presidential election on Tuesday showed that Kamala Harris and Donald Trump are evenly matched, which could have a significant impact on market sentiment. At the same time, the Federal Reserve is expected to announce a 25 basis point interest rate cut on Thursday, which may affect demand forecasts by relaxing lending conditions.

China's economic stimulus measures

China is holding an important meeting this week to discuss further economic stimulus plans aimed at stabilizing the economy. Analysts predict that the government will introduce measures to address local government debt issues, which may lead to broader support for demand and boost the outlook for oil demand. China's economic decisions are closely monitored by oil traders as China remains a major consumer of crude oil.

Market forecast: bullish outlook in the near future

The consistency of technical indicators and the OPEC+delay in increasing supply indicate a bullish short-term outlook for crude oil. However, potential volatility remains high due to geopolitical tensions, US election results, and Federal Reserve interest rate decisions. Crude oil prices may continue to rise, but cautious sentiment may persist in response to any escalation of geopolitical risks in the Middle East.

technical analysis

(WTI Crude Oil Daily Chart)

On the daily chart, after OPEC+postponed production increases, WTI crude oil prices have now returned to the key resistance level of 71.67. The buyer will hope to see a price breakthrough higher to increase their bullish bet on the 77.60 level. On the other hand, sellers may tend to lower prices in order to drop to 65.