Oil Market Reset: Crude Now In 'Contango,' All Eyes Shift To OPEC, Analysts Flag 2024 Rally
Portfolio Pulse from Piero Cingari
Oil prices are facing their fourth consecutive weekly loss, with the market shifting to contango, indicating higher future prices. The December oil futures contract is trading at a discount to April 2024, reflecting current oversupply. The bear market has seen a 21% drop in prices since September 2023. The United States Oil Fund (USO) remains flat YTD. OPEC's upcoming meeting on Nov. 26 will address falling prices and global growth concerns. Goldman Sachs predicts a tighter oil market in 2024, with Brent prices likely maintained between $80-$100 by OPEC.
November 17, 2023 | 4:59 pm
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NEUTRAL IMPACT
The United States Oil Fund (USO) is flat year to date despite the oil market entering a bear phase and the shift to contango. The upcoming OPEC meeting and Goldman Sachs' outlook may influence its performance.
USO's flat performance YTD suggests it has already absorbed current market conditions. The contango situation and OPEC's decisions may impact oil prices, but Goldman Sachs' prediction of a tighter market in 2024 could stabilize USO in the short term. The score is neutral due to the uncertainty of the OPEC meeting outcome and mixed market signals.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80