- Oil price turns flat after having peaked above $70.00 briefly with US stockpiles building.
- Tensions brew in the Middle East with President-elect Donald Trump vowing to iniate war if Israeli hostages are not released.
- The US Dollar Index ticks up on Fed officials pushing back on odds for a rate cut in December.
Crude Oil is unfit to remain bullish enough to hold above $70.00 on Wednesday, with traders getting nervous over geopolitical tensions and OPEC+ set to act. On the geopolitical side, President-elect Donald Trump vowed to drag the Middle East into a war if Israeli hostages are not released by Hamas by the time he takes office in January. Meanwhile, OPEC+ might be surprising friends and foes with a possible six-month delay of its production normalization output, Bloomberg reports.
The US Dollar Index (DXY) – which measures the performance of the US Dollar (USD) against a basket of currencies – is ticking up within a tight range ahead of Friday’s Nonfarm Payroll numbers. Traders appear to be sitting on their hands, keeping their powder dry to trade the last Jobs Report for 2024. Later on Thursday, Federal Reserve Chairman Jerome Powell will make an appearance, though no market moving comments are expected.
At the time of writing, Crude Oil (WTI) trades at $69.98 and Brent Crude at $73.85.
Oil news and market movers: Next 24 hours pivotal
- Seasoned OPEC+ watcher Grant Smith warned in a recent post that OPEC+ may need to deliver a surprise plot twist at Thursday’s meeting to push Oil prices materially higher. Smith raised the possibility of a six-month pause, right out to the second half of 2025, Bloomberg reports. Market consensus is for a three-month delay.
- US President-elect Donald Trump vowed earlier this week that he would not refrain from dragging the Middle East into a war if Israeli hostages are not returned home by the time he takes office, Reuters reported.
- At 15:30 GMT, the Energy Information Administration (EIA) will release its weekly Crude stockpile change numbers. Expectations are for a drawdown of 2.06 million barrels against the draw of 1.844 million barrels last week.
- The overnight Crude stockpile change numbers from the American Petroleum Institute (API) overnight came in at a surprise build of 1.232 million barrels against the 2.06 million barrels drawdown expected and partially offsetting the big drawdown of 5.935 million barrels seen last week.
