Oil Prices Dip as OPEC+ Meeting Delayed, Investors Weigh Central Bank Rate Hikes

23 Nov 2023 , 07:57 AM

Oil prices edged lower in choppy trade on Wednesday as OPEC+ delayed its meeting to discuss production quotas, while investors weighed the prospect of further interest rate hikes from major central banks.

Brent crude futures fell 36 cents to $87.36 a barrel by 0431 GMT, while U.S. West Texas Intermediate (WTI) crude futures declined 49 cents to $78.32 a barrel.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, had been scheduled to meet on Wednesday to decide on output levels for December. However, the meeting was delayed to Thursday, sources told Reuters.

‘The delay in the OPEC+ meeting is keeping investors on edge,’ said Stephen Innes, managing partner at SPI Asset Management.

‘The market is also digesting the prospect of further interest rate hikes from major central banks, which could slow economic growth and demand for oil,’ Innes added.

The U.S. Federal Reserve is expected to raise interest rates by 75 basis points next week, while the European Central Bank is also expected to tighten policy.

Investors are also watching for signs of progress in talks between Iran and the United States on a nuclear deal, which could lead to a lift on sanctions on Iranian oil exports.

‘A revival of the Iran nuclear deal could add to global supply and put downward pressure on oil prices,’ said Tamas Varga, analyst at PVM Oil Associates.

Technical analysis

• Brent crude futures are testing the support level at $87 per barrel, while WTI crude futures are testing the support level at $78 per barrel.
• If Brent crude futures break below $87 per barrel, they could fall further to $85 per barrel.
• If WTI crude futures break below $78 per barrel, they could fall further to $76 per barrel.

Key levels

Brent crude futures:

• Support: $87 per barrel
• Resistance: $89 per barrel

WTI crude futures:

• Support: $78 per barrel
• Resistance: $80 per barrel