Crude oil bulls were all fired up in the month of November as oil prices gained over 27%.
London-based oil contract Brent crude futures, at the time of writing this report, was down 1.22%, trading at $47.59/barrel. For the month of November, Brent gained 28%, its best month since a 95% jump in May from April’s lows.
U.S based oil contract West Texas Intermediate futures, was also down at 0.68%, at $45.03 per barrel. For the month of November, it rallied up by 27%, also recording its best recovery since May.
What this means: oil traders are throwing caution into the wind, thereby increasing their buying pressure on reports of positive news on Covid-19 vaccines, including the chance of some Americans getting their first doses before Christmas, triggered oil prices to go up momentarily taking to account COVID-19 pandemic remained the major obstacle crude oil bulls were facing.
However, Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics, spoke on the need for oil traders to be a bit wary of the bias that the Saudis are considering taking the bench in regards to OPEC+ compliance, cut many energy analysts off guard.
“According to press reports, the big news overnight is that Saudi Arabia is considering resigning from its role as co-chair of the OPEC+ Joint Ministerial Monitoring Committee, which puts pressure on crude. Saudi co-chairs the JMMC with Russia. It is not clear what Saudi’s goals are, but it is not easy to imagine an OPEC+ without Saudi playing a direct role at the top. The talks are delayed letting cooler heads prevail, suggesting that the infighting was reaching unpalatable levels. Given the gravity of the situation, all parties felt it was best to have a cooling-off period,” Innes stated.
What to expect: Still OPEC+ awaited deal remains insight, and crude oil prices are in a pretty good spot for 2021 with COVID-19 vaccine rollout expected to push oil prices around the $60/barrel mark despite the current level of OPEC+ muteness prevailing.