- Crude barrels consolidate as energy markets weigh OPEC fears.
- Disagreement over quotas led to a delay of a planned OPEC meeting.
- Discrepant production quota desires within OPEC are weighing on energy risk sentiment.
West Texas Intermediate (WTI) crude barrels continue to grind into the low side on Thursday, struggling to develop momentum as barrel traders chew on the row from the Organization of the Petroleum Exporting Countries (OPEC), which sees advocates for further production cuts that comes into conflict. with smaller crude oil producers looking to increase production to defend their energy exporting sectors.
The United Arab Emirates (UAE) has been chasing higher OPEC production quotas for years as it seeks to increase its crude oil production and export facilities, which have plenty of spare capacity.
OPEC dispute over quotas causes meeting delays, crude traders jittery
Saudi Arabia, one of the biggest players on the OPEC board, has aggressively pursued production cuts across the oil cartel’s member nations to bolster crude prices. The UAE was given additional quota capacity at OPEC meetings last year to the detriment of several smaller OPEC states, mostly in Africa, which saw their production caps tightened further to give the UAE additional production capacity.
These oil-producing nations are now dissatisfied with their current limits on oil pumping and sales and are seeking to increase their respective quotas.
Saudi Arabia is reportedly expressing displeasure with OPEC member countries seeking additional production capacity as the Kingdom of Saudi Arabia seeks to further cut global oil production in an attempt to offset falls in crude oil prices from rising output from non-OPEC members.
OPEC’s upcoming meeting scheduled for Nov. 30, where the oil cartel will discuss current production quotas, was delayed by four days, and energy investors are seeing a drag on sentiment ahead of the delayed meeting.
Technical outlook for crude oil
WTI barrel bids are seeing a technical ceiling forming at the 200-day Simple Moving Average (SMA), with prices capped below the moving average as crude forms a consolidation pattern in the $78 to $74 region, a bid that barrels in the neighborhood have not seen. since a bullish result last July.
WTI peaked near $94 a barrel. barrel in late September and is down nearly 23% from peak to trough, with Thursday’s bid still down nearly 19% from September’s $93.98 peak despite a rebound from last week’s drop to $72.38, its lowest bid in 18 weeks .