​WTI Sees Turmoil as OPEC+ Turns Divided

WikiFX News (1 Dec.) - On Monday, OPEC+ postponed its talks until Dec. 3 after a split over delaying output hike. As a result, WTI crude oil fluctuated sharply, falling to a low of 44.62 during the session. Despite a later rally, oil prices consolidated around 45.0 after a second drop.

The OPEC+ informal meeting ended recently without an agreement among its members regarding the delay of output hike. The majority of members agreed to delay the plan until the first quarter of 2021, excepting the United Arab Emirates (UAE), who believed an unfair allocation of production caps and the UAE economy had reeled from shriveling oil revenue. Risk aversion soared in this case, dragging WTI below $45 per barrel on Monday, a drop once reaching 1.8%.

With that said, OPEC+ will likely postpone oil production for three to four months so as to smooth over the first quarter of next year, considering shocks on oil demand from the pandemic in Europe and the US.

Oil prices may suffer short-term losses amid uncertainties of OPEC+'s output-hike delay but will find the medium-term uptrend sustained. Thus the medium-term objective - breaching above $50.0 - is still foreseeable.

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Chart: Trend of Oil Prices