Trading volatility: Brent around OPEC meeting
The postponement of the weekend’s OPEC+ ministerial meeting to Thursday 30th has seen traders short Brent, the OPEC benchmark.
IGTV’s Jeremy Naylor looks at the potential risk to the downside in what appears to be a disagreement amongst OPEC+ members on the need for further supply cuts.
(AI Video Transcript)
The OPEC meeting
The Organization of the Petroleum Exporting Countries (OPEC) meeting, which was supposed to happen this weekend, has been delayed until next Thursday, which is causing people to wonder about the disagreements and tensions within the organization. The main issue seems to be that they can't agree on how much they need to cut oil production in order to keep prices stable. Because of this, oil prices have been under pressure, with Brent, which is kind of like the standard for OPEC pricing, trading below the 200-day moving average and forming lower highs and lows.
There's a specific level that people are watching out for, which is the lowest point that oil prices reached on November 16th. If the market goes down as expected, it could be a good chance to sell. On the other hand, if OPEC agrees on significant cuts in supply, it could help boost the market. Right now, the amount of oil being produced has already gone down by 5% in the last year because of the cuts that OPEC+ made. So, if things just stay the same, it would be a good time to sell, with the stock going above the 200-day moving average.
Brent oil prices
However, if OPEC ends up making a weakened deal, it could make oil prices even more unstable. Some countries that rely on selling oil really need the money, so they're selling more oil than they're technically allowed to under the supply cut agreements. This postponed meeting, which is now set for November 30th, is really important and could potentially cause Brent prices to go down. So, it's a bit of a wait and see situation right now.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market.
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
