On Wednesday, crude oil futures slightly rose, driven by short covering. December crude oil futures on the New York Mercantile Exchange rose 0.4% to $68.43 per barrel, while Brent crude oil futures for January rose 0.5% to $72.28 per barrel. However, as the US dollar hit a seven-month high, it limited the upward potential for oil prices. Additionally, OPEC+ lowered global demand growth forecasts, continuing the previous weak trend in oil prices.
In the natural gas market, December natural gas futures on the New York Mercantile Exchange rose 2.6% to $2.983 per million BTUs, continuing the recent uptrend. Meanwhile, the global market is closely watching potential policy changes following Trump’s election victory. Morgan Stanley analysts noted that the market is weighing the potential positive and negative impacts of Trump’s policies on the oil market. On one hand, implementing a comprehensive tariff plan could drag down the global economy, thereby reducing oil demand; on the other hand, policies pressuring Iran might further tighten supply, making the upcoming OPEC+ ministerial meeting on December 1 a market focus.
Morgan Stanley stated that it expects the OPEC+ production agreement to remain unchanged in the short term, but by 2025, the market will face pressure from rising inventories. The investment bank expects the current low inventory levels to support Brent crude oil around $70 per barrel, but as inventories gradually increase, oil prices may face downward pressure.
Regarding Iran, the oil minister said they have formulated a response plan to maintain oil production and exports in case the US imposes further sanctions. The Iranian government has stated that it is prepared to ensure its oil supply is not restricted by policies in the future.
Overall, although short covering temporarily boosted oil prices, the upward movement is limited by a strong US dollar and declining demand expectations. The market is focused on the upcoming OPEC+ meeting to determine future direction.
