Crude oil prices resumed the decline after some shallow recovery attempts earlier this week. On Friday, Brent has challenged the $62 support and slipped to fresh February lows around $61.80. The selling pressure has eased a bit since then but downside risks remain as the barrel struggles to get back above $62.
The market has shifted focus to the upcoming OPEC+ meeting in early December. But after the Saudis announces a possible production cut by 1.4 m barrels, there are no any further signals from the exporters. This silence makes oil traders nervous, and the uncertainty ahead of a critical meeting fuels further profit taking, even at the current low levels as market participants tend to reduce exposure to oil risks.
Relentless rise in US shale activity adds to the negative pressure on prices. In addition, Brent is affected by risk aversion that prevails in the global financial markets against the backdrop of US-China trade war and signs of slowing global growth. In this context, the market will closely follow the incoming economic data from China and monitor the dialog between Washington and Beijing.
In current circumstances, Brent will hardly be able to stage a consistent corrective rebound without some supporting factors. First of all, the market will be waiting for positive signals from OPEC. A better risk sentiment could also help. Otherwise, prices could target the $60 handle in the days ahead.