Oil building momentum as highs tested

Oil prices are slipping a little again on Wednesday, off just over 1%, having risen close to their range highs again yesterday.

WTI came within a whisker of $42 and, despite today’s pullback, seems to have momentum on its side. An overconfidence, perhaps, that a stimulus deal will be reached and that OPEC+ has the markets back, despite passing up the opportunity this week to delay two million barrels of production restarts from January.

Of course, they can pull the trigger on that delay at any point and they meet again in December which may be a better time to announce such a move.

By then they’ll know who the US President is going to be for the next four years, how bad the second wave is and how quickly Libya is ramping up production, for example. Still, this confidence in the markets remains overly optimistic and signficant risk lies below, as a result.