Crude Oil futures are weaker ahead of tomorrow's OPEC meeting, which is widely expected to be a non-event. The Oil cartel is not expected to change its production quotas, as they have to be pleased with where prices are in light of current global economic conditions and the resilience of the US Dollar. The Crude Oil market has already priced-in an economic recovery for the most part, and prices are relatively high for the current market fundamentals. Supplies are ample at the moment, and we will be entering the low demand period between peak winter heating demand and the driving season, which could buffer current inventory levels.
Today, traders' focus will be on the Fed, as the FOMC will make their rate decision today. Like the OPEC meeting, there is no expectation of a change in the status quo, but traders will likely closely watch what the central bank has to say about rate policy going forward. If there is any indication that rates will be raised sooner rather than later, Crude Oil could find itself under pressure. Given the lack of new positive economic developments, Oil prices favor a slight negative bias over the near-term, with the potential of trading into the low 70's, barring a significant pullback in the Dollar or inventory shock.
