Image: A/S Global Risk Management

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Yesterday, Brent crude traded in a range between $71.88 and $68.87 - a 3-dollar range. The close was at $70.12 but opened a dollar lower this morning.

A bearish sentiment comes as the three largest oil producers, Russia, the US and Saudi Arabia, have increased production quite a bit as a means to compensate for the expected loss of Iranian supply from the beginning of this month. The market expected around a million barrels per day to be cut from Iran, but as waivers were granted to a row of oil importers, "only" 500-600 kbpd is actually off the market. The Saudi energy minister Khalid Al-Fahli on Sunday stated that Saudi Arabia would cut supply by 500 kbpd from December. The 500 kbpd is likely going to be the main topic of the agenda on the next OPEC meeting in start December as Saudi Arabia allegedly is not certain whether other producers would agree to curb output. Furthermore, U.S. president is urging Saudi Arabia and OPEC to avoid curbing output as he once again yesterday tweeted that Saudi Arabia and OPEC hopefully would not cut oil production.

In addition to at-the-moment bearish fundamentals, financials in terms of the US dollar strength is a bearish force as well. The index is at the highest point since mid-2017. The dollar index is known for being negatively correlated with commodities, hence oil prices meaning that when the index is high, oil is low. The dollar index is therefore likely to weigh on the Brent crude price.

Due to yesterday's U.S. holiday, the weekly oil inventory data from API and EIA is one day delayed to Wednesday and Thursday respectively.