With mounting uncertainty regarding OPEC+ output cuts, crude oil saw a 1.97% decrease, closing at 6281. Fears of a drop in the demand for fuel were exacerbated by worries about China’s economic crisis. In response to declining oil prices and forecasts of a surplus in the upcoming year, the OPEC+ coalition decided to reduce its output voluntarily by about 2.2 million barrels per day starting early in 2019.
There are still concerns about whether the announced voluntary reduction can actually be enforced. Contrary to the official index’s signal of contraction, a private gauge revealed an unanticipated rise in China’s manufacturing activity in November. September saw a decline of 89,000 barrels per day (bpd) in U.S. crude oil rail shipments to 170,000 bpd.
Domestic shipments decreased by 58,000 bpd to 128,000 bpd, while Canadian sales to the U.S. decreased by 32,000 bpd to 42,000 bpd. According to figures from the Energy Information Administration, meanwhile, U.S. crude production in September hit a record 13.24 million barrels per day, driven primarily by a large rise in North Dakota’s Bakken shale.
Though prices fell by -126 rupees, the market technically saw fresh selling with a 15.8% increase in open interest that settled at 11825. With 6191 serving as a potential test, crude oil has gained support. A breakthrough may allow testing 6499, with resistance estimated at 6390.
