For the second day in a row, WTI crude oil is showing some weakness, hovering around $60.70 per barrel. Traders are on edge, partly because everyone’s waiting to see what the Federal Reserve does next. Last week, most people thought a rate cut in December was basically a done deal. Now? Not so much. Fed Chair Jerome Powell made it clear: another cut isn’t guaranteed. That shook things up—chances of a December cut dropped from 94% to just 65%.
There is a small safety net for oil prices despite all of this caution. The OPEC+ plan to increase production at the beginning of 2025 has been put on hold. Given the current risk of oversupply, the group—including Russia—wants to maintain market stability. According to Bank of America analysts, the pause is a wise decision because it prevents prices from falling below $50.
Originally, OPEC+ was going to bump up output in December, but now they’re holding off on further increases from January through March, thanks to shifting seasonal demand. Still, the market isn’t out of the woods. There’s a real risk on the supply side—tougher U.S. sanctions on Russian energy companies and Ukrainian drone attacks on Russian infrastructure have everyone looking over their shoulders.
In the short term, there’s still pressure pushing prices down, but traders think OPEC+’s output pause and ongoing geopolitical drama will keep WTI from dropping too far. For now, $60 looks like a solid floor.
