The oil market is on alert for a possible decline to $74 per barrel as recent developments suggest a shift in the supply-demand dynamic. Following the release of the Federal Reserve's minutes which indicated a consensus on maintaining interest rates, the US dollar has strengthened. Meanwhile, the American Petroleum Institute (API) reported a substantial increase in US crude inventories, with a jump of over 9 million barrels as of Tuesday.
Today, the Energy Information Administration (EIA) is set to release its crude stockpile change report, with expectations pointing to a minor build. Additionally, natural gas storage change figures and Baker Hughes's oil rig count update are also due today, potentially influencing market sentiment.
On Tuesday, Morgan Stanley (NYSE:MS) provided insights into the oil market's trajectory, suggesting that Brent crude could stabilize around $85 per barrel. This forecast is based on OPEC's ongoing production curtailments and an expected steady demand for OPEC oil at approximately 28.3 million barrels per day until at least 2024. The firm also anticipates Saudi Arabia may extend its production cuts beyond the official quota.
Adding to market uncertainty, OPEC Plus has postponed its policy meeting from November 26 to November 30, causing Brent crude to dip below $80. Despite a notable reduction in U.S. output and an overall cut of over five million barrels per day by OPEC Plus members, Morgan Stanley projects that non-OPEC supply growth will match the slowing demand increase anticipated in the coming year.
Current prices show West Texas Intermediate (WTI) trading at $77.36 and Brent at $82.03 per barrel. Technical analysis suggests that there is resistance near $80 and support around $74, with market participants closely monitoring the potential for OPEC+ intervention should prices continue to fall.
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