On Monday (December 2nd), US crude oil rose slightly during the Asian trading session, trading around $68.30 per barrel. Market volatility further decreased, and we need to wait for new changes in fundamentals.

This week, we will pay close attention to EIA inventory data and the OPEC+meeting. At the same time, we will receive US non farm payroll data this week. If the non farm payroll data continues to strengthen, it will continue to pressure the Federal Reserve to cut interest rates, which is not conducive to bullish oil prices.

Last week, due to the easing of geopolitical sentiment, the pressure on the supply side eased, and the weekly oil price fell by more than 3%. Currently, it is operating within the range, and the market expects the OPEC+meeting to be postponed to increase production and support oil prices.

But the bulls are currently clearly powerless, and global demand expectations are declining. Beware of another pullback and wait for direction to choose.

The official Lebanese news agency announced last Friday that four Israeli tanks entered a Lebanese border village. Despite mutual accusations of violating the ceasefire agreement, the ceasefire agreement that came into effect last Wednesday reduced the risk premium of oil and caused oil prices to fall.

However, the Middle East conflict has not interrupted oil supply, and it is expected that oil supply will be more abundant by 2025. The International Energy Agency believes that the oversupply is expected to exceed 1 million barrels per day, equivalent to over 1% of global production.

Tamas Varga from oil broker PVM said, "The latest situation suggests that next year is expected to be looser than currently, and oil prices will be lower than the average level in 2024

The OPEC+, consisting of the Organization of the Petroleum Exporting Countries and allied countries including Russia, has postponed its next policy meeting from December 1st to December 5th. It is expected that OPEC+will decide to further extend the production cuts at this meeting.

Poor demand and oversupply, OPEC will face a tough battle if it wants to push up oil prices

A monthly survey released by Reuters last Friday showed that oil prices may stagnate in 2025 as the demand outlook casts a shadow and global supply is abundant, outweighing the expected boost from OPEC+'s delayed production plans.

In the survey, 41 interviewed economists and analysts predicted that the average Brent crude oil price in 2025 would be $74.53 per barrel, lower than the $76.61 predicted in the October survey. The 2025 estimate for this global indicator price has been lowered for the seventh consecutive time.

The average price of this indicator so far in 2024 is $80 per barrel. It is expected that the average crude oil price in the United States in 2025 will be $70.69 per barrel, lower than last month's expectation of $72.73.

Stratas Advisors President John Paisie stated that oil traders' confidence has become very negative due to concerns about the global economy and whether OPEC+can align supply with demand.

Earlier in November, the Organization of the Petroleum Exporting Countries (OPEC) lowered its forecast for global oil demand growth in the next two years, while the International Energy Agency (IEA) predicts that even if OPEC+continues to cut production, global oil supply will still exceed demand by 2025.

OPEC+includes allies such as OPEC and Russia. Kim Fustier, head of oil and gas research at HSBC Europe, said, 'We expect OPEC+to announce another three-month extension of production cuts until April 2025. Given that oil prices are only slightly above $70 per barrel, it cannot be ruled out that OPEC+will postpone production increases until later next year.'.

On a technical level, the daily chart of US crude oil is still running below the moving average and has not fallen below the previous low point. The direction selection is mainly based on waiting for consolidation, and we will continue to monitor whether the moving average turns downwards.

Daily chart of US crude oil