Oil Monthly Forecast – December 2017

The oil prices held fairly steady during the course of November as some geopolitical issues across the Middle East helped to keep the bid under the oil prices and this helped to push the prices higher during this period. The oil prices closed near the highs of its range and it has to be said that the OPEC members have achieved what they had set out for, a few months back. November was the month when the prices broke clear of the $55 region and once that was done, it was clear that the next target would be the $60 region as far as the oil prices are concerned.

Oil Prices Buoyed By Political Crisis

But that target has not yet been achieved but on the other hand, the corrections in the oil prices have also been very few and far between, which makes us bleive that attaining the $60 region would be only a matter of time for the oil bulls. The break through from the $55 region happened during the month due to the political crisis in Saudi Arabia, which is one of the biggest producers of oil in the world and it has enormous clout in the OPEC. In that country, we have been seeing the King trying to gain absolute control over the country by taking action against all the challengers to the throne. No one is sure of what exactly is happening in that region but the fact is that there is a lot of uncertainty. This led to concerns over the supply of oil and this helped the oil prices to move higher.

But this uncertainty eased somewhat during the course of the month but this did not lead to an easing of the oil prices as the prices continued to remain steady as the inventory data showed no signs of going higher again. We also had the OPEC producers meeting again towards the end of the month and the prices were buoyed in anticipation of the producers agreeing to continue the production cut. It was very important for the producers to agree to agree to an extension and it would have led to a large correction in the oil prices if they did not agree so. It was a relief to the oil bulls that the producers agreed to an extension by nine more months and this basically clears the way for the oil prices to rise higher towards the $60 region.

Oil Prices Expected to Continue Higher

Looking ahead to the month of December, the bulls and the other traders would be watching the developments in Saudi Arabia very closely. Though the situation in that region seems to be fairly settled, there have been increasing risks in that region with Saudi Arabia, Iran and Qatar continuing to be at loggerheads with each other. It is a sign of the times that despite this tension, these countries always tend to agree on the need to push the oil prices higher as their economies depend on the same. That is why we find them working together during the OPEC meetings and ensuring that the oil prices are kept high and they have managed to make this happen over the past few months.

We believe that the oil prices would continue to remain buoyed during the month of December and we would be looking forward to the cracking of the $60 region. So far, any kind of strength or weakness in the dollar has had limited impact on the oil prices which seem to be fully driven by the production and inventory data alone, over the last few months. Due to this, we can safely expect the incoming oil data to continue to support the bullish path of the oil prices and keep it buoyed in the upcoming month of December.