Brent Remains Tightly Rangebound

Brent crude oil prices have remained tightly rangebound this week, analysts at BMI said in a BMI report sent to Rigzone by the Fitch Group this morning.

“This is despite some significant news flow, including the threat made by President-elect Trump to impose additional tariffs on Canada, China, and Mexico on his first day in office and the ceasefire agreement reached between Israel and Hezbollah,” the analysts said, highlighting that both of these factors “should have been net bearish for prices”.

“We believe the market has entered into a holding pattern, weighing up the potential price impacts of a second Trump term, as well as the outcome of the next OPEC+ meeting, now scheduled for December 5,” the analysts noted in the report.

“Although we expect the OPEC+ group will opt to rollover the existing cuts into the new year, this will not be sufficient to fully erase the production glut we forecast for next year,” they warned.

In the report, the analysts stated that, “in light of our bearish fundamental outlook, ongoing weakness in oil market sentiment, and the downside pressure on prices we expect to accrue under Trump, we have downwardly revised our forecast”.

They revealed in the report that they now put Brent at an annual average of $76 per barrel in 2025, “down from $78 per barrel previously”.

In a market analysis sent to Rigzone on Thursday, Joseph Dahrieh, Managing Principal at Tickmill, said crude oil futures stabilized this week as the market anticipates the outcome of the OPEC+ meeting.

“Meanwhile, the ceasefire agreement between Israel and Hezbollah has reduced immediate concerns over potential supply disruptions from the Middle East, further weighing on prices,” he added.

“Adding to the bearish tone is the slowing fuel demand growth in major economies like the United States and China. This combination of factors could point to a near-term bearish outlook for global crude oil prices,” he warned.

In the analysis, Dahrieh highlighted that attention is now turning to the OPEC+ meeting, “where discussions are expected to center around delaying planned production increases originally set to begin in January”.

“Whilst market consensus leans toward a deferral, the duration of any delay remains a critical factor. A longer postponement could support the market over the medium-term by reinforcing supply constraints,” he added.

Dahrieh also warned in the analysis that the geopolitical backdrop “adds complexity, with the potential risks to Iranian supply in case of sanctions or breach in the cease-fire agreement”.

“Against this backdrop, trading activity remains subdued amid the U.S. Thanksgiving holiday, keeping oil prices largely range-bound,” he added.

In a separate market analysis sent to Rigzone on Wednesday, Rania Gule, a senior market analyst at XS.com, highlighted “reports that OPEC+ members are engaged in discussions to extend production cuts”.

“Should these measures be confirmed, they will undoubtedly support prices in the coming period,” Gule said in the analysis.

“From my perspective, the anticipated delay in production normalization until the second quarter of 2025 highlights OPEC+’s acute awareness of the market’s sensitivity to changes in output levels,” Gule added.

“Such a move demonstrates the alliance’s commitment to avoiding a rapid resurgence of oversupply, which could negatively impact prices. In my view, this proactive strategy reflects a calculated effort to leverage current market momentum while ensuring sustainable stability,” Gule went on to note.

A statement posted on OPEC’s website on Thursday announced that the 57th Meeting of the Joint Ministerial Monitoring Committee (JMMC) and the 38th OPEC and non-OPEC Ministerial Meeting (ONOMM), had been rescheduled from December 1 to December 5, “via videoconference, as several Ministers will be attending the 45th Gulf Summit in Kuwait City, the State of Kuwait”.

To contact the author, email andreas.exarheas@rigzone.com