On Tuesday (December 3rd), US crude oil slightly fell during the Asian trading session, trading around $68.05 per barrel. Due to mixed fundamentals, there was no clear direction.

Market trading has become further sluggish, with a focus this week on EIA crude oil inventories and whether Thursday's OPEC+meeting will postpone production cuts to support a rebound in oil prices.

At present, the slowdown in market expectations for the Federal Reserve's December interest rate cut has limited the rise in oil prices. At the same time, the US dollar index is still running at a high level, which is not conducive to the rebound of oil prices. The overall trend is volatile, and we are waiting for a direction to choose.

The ceasefire between Israel and Lebanon that came into effect last Wednesday seems increasingly fragile. The Israeli military stated on Monday that it is currently striking "terrorist" targets within Lebanon. Israel and the Lebanese armed group Hezbollah accuse each other of violating the ceasefire agreement.

Geopolitical risks continue to increase, "said Dennis Kissler, Senior Vice President of Trading at BOK Financial." Although a ceasefire is underway in Israel, it seems clear that there are some misunderstandings about whether the ceasefire is correct

The OPEC+, consisting of the Organization of the Petroleum Exporting Countries and its allies, has postponed its next meeting to December 5th. OPEC+sources said last week that the meeting will discuss delaying the oil production increase plan originally scheduled to start in January.

Atlanta Fed President Bostic said he is open to whether to cut interest rates again at the Fed's December meeting, and the upcoming employment data will have a significant impact on this decision.

High interest rates will increase borrowing costs, thereby slowing down economic activity and suppressing demand for oil.

Waller commented at a central bank seminar organized by the Institute for Economic Research in the United States, "Policy still has enough constraints, so we will not significantly change the stance of monetary policy by cutting interest rates again at the next meeting, and will leave enough space to slow down the pace of interest rate cuts in the future if needed, in order to continue making progress towards the inflation target

Raymond James, Managing Director of Fixed Income Capital Markets, Ellis Phifer, stated that Waller's remarks are reassuring. His remarks indicate that people's support for interest rate cuts is stronger than usual, but we still need to observe the employment data later this week.

The Chicago Mercantile Exchange's FedWatch tool shows that after Waller's speech, the market increased the probability of the Fed cutting interest rates by 25 basis points this month from 66% late last Friday to 75%.

At the same time, interest rate futures show that the possibility of the Federal Reserve suspending interest rate cuts has decreased from 34% last Friday to 25%. The yield of US treasury bond bonds rose slightly earlier on Monday, after the Institute for Supply Management (ISM) said that the PMI of US manufacturing rose to 48.4 in November, higher than the 47.5 estimated by Reuters.

From a technical perspective, the daily volatility of US crude oil has decreased and has been consistently operating below the moving average. Coupled with the volatile nature of technical indicators, if it is unable to stabilize at the integer level of $69 in the short term, it may test the support of the lower edge of the box again.

Daily chart of US crude oil