Quasar Elizundia
Lagos — “Oil prices have shown a primarily positive trend in recent sessions, with WTI crude rising more than 3% at the beginning of the week, reaching $71.50 per barrel. This bullish movement follows OPEC+’s announcement to delay the planned production increase, extending the current cuts of 2.2 million barrels per day until December 2024. The decision reflects the need to support prices amid weak demand, especially from China, and rising supply outside the group.
The recent positive momentum in crude also found support in geopolitical tensions, particularly in the Middle East. Iran has threatened reprisals against Israel following Israeli airstrikes on October 26. The possibility of an expanded conflict has reintroduced market concerns, driving crude prices higher as potential supply disruptions are anticipated. This geopolitical situation could sustain oil price support.
Looking ahead, the U.S. presidential elections could play a crucial role in determining the direction of oil prices. A potential victory for former President Donald Trump could result in an increase in U.S. oil production due to his focus on reducing regulations and expanding domestic energy production. This could put downward pressure on international oil prices by boosting supply. Conversely, a victory for Vice President Kamala Harris could maintain stable production, with a balanced focus on clean energy and stricter environmental regulations, potentially providing a stabilizing effect on prices.
Despite recent movements, the oil market continues to face significant challenges. Weak demand from China and excess supply from the Americas contribute to an uncertain dynamic, where geopolitical factors and OPEC+ decisions will remain key in determining the future trajectory of prices. The upcoming OPEC+ meeting on December 1 will be an additional crucial focus for the market.”
*Quasar Elizundia, Expert Research Strategist – Pepperstone
