OPEC meeting preview: No change expected, crude likely to remain under pressure

Oil prices are like the heartbeats of the global economy, constantly pulsing with each new data point and geopolitical event. As the world waits for the outcome of the OPEC meeting, traders and analysts alike are monitoring the oil market like a clinician monitors a patient's vital signs.

Background

The Organization of the Petroleum Exporting Countries (OPEC) is scheduled to meet on February 1st, 2023 in Vienna, Austria. The Joint Ministerial Monitoring Committee (JMMC) will also convene during the meeting, which will focus on the organization's current production policies and the state of the global oil market.

OPEC meeting expectations

According to Reuters, delegates at the meeting expect OPEC to keep its oil policy steady, with no major changes to production levels. This sentiment is echoed by CIBC, which states that OPEC and JMMC are unlikely to recommend changes to oil output levels.

Geopolitical implications

OPEC's decisions not only impact the oil market, but also have significant geopolitical implications. As a cartel of major oil-producing countries, OPEC wields significant influence over global energy markets and can affect the balance of power among nations, especially as the Russia-Ukraine war wages.

Technical analysis: WTI crude oil (US OIL)

Oil prices have been on a downward trend in the lead-up to the OPEC meeting. While no major changes to oil production levels are expected, any unexpected developments at the meeting could still cause significant fluctuations in oil prices.

Looking at the daily chart below, WTI crude oil peaked above $120 back in June and it has been trending consistently lower since then. Since July, prices have been capped by the 100-day EMA, which now sits just above the current price, and the daily RSI indicator has been locked in a bearish zone (below 60). Unless we see a big surprise production cut from OPEC, the path of least resistance remains lower for crude prices, with bears looking for a potential drop back into the lower $70s as long as resistance near 82.50 holds.

Source: StoneX, TradingView

As the OPEC meeting draws closer, the world will be watching to see how the organization's decisions will shape the global energy market and influence oil prices. The pulse of the oil market may quicken or slow depending on the outcome, but one thing is certain - the oil market will continue to beat with the rhythm of the global economy.

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