Chart Of The Day: Oil Faces Strong Headwinds – Investing.com

Chart Of The Day: Oil Faces Strong Headwinds – Investing.com

This article was written exclusively for Investing.com

While there is talk of reaching $100 per barrel (and some even calling for $200) amid concerns over a supply shock, I reckon the greater risk is that prices will head lower from here. 

Hurricane-hit production declines in the US have been almost fully restored and oil ended a run of 7-week drawdown with a sizeable 4.6 million barrel rise last week. Meanwhile, the OPEC+ is on Monday to address some of the supply risks. The group will most likely try to ease pressure on oil consumer nations such as India and China. 

One option that the OPEC+ might opt for would be to double the expected November production level increase—that is 800K bpd—and then, depending on the situation in the next couple of months, leave things unchanged in December. The group had already decided to increase output by 400K bpd for October at its previous gathering.

While refusal to do anything might provide oil prices a further shot in the arm in the short-term, this will only come back to haunt OPEC in the longer term outlook, as rising oil prices and in turn even more could, for