The global benchmark for oil futures, Brent, largely held its price floor above $70 a barrel for much of November, after threatening to exceed it at one point. and he looks set to stay there for the time being.

Earlier in the month, with the U.S. benchmark West Texas Intermediate already below $70 and Brent moving quite close in the face of weaker oil demand, an intervention by the Organization of Exporting Countries of oil has largely prevented further falls in prices.

November 3the producer group chose to postpone the planned gradual increase in production (which is currently around 2.2 million barrels per day lower) for an additional month, until January 2025.

Although OPEC never officially comments on oil price levels, the market has widely assumed that it is trying to protect Brent’s floor price of $70. This move has worked so far and may just keep prices above the level until the end of the year, with a little circumstantial and temporary help from elsewhere.

The dynamics of global oil demand have not changed significantly and the Chinese economy remains a major concern. However, outages have largely supported prices from a supply perspective, particularly recent disruptions at two major oil fields: Johan Sverdrup in Norway and Tengiz in Kazakhstan.

The Johan Sverdrup field temporarily halted production on Monday following an onshore power outage. The field, which has a production capacity of 755,000 b/d, accounts for around 36% of Norway’s total oil production.

Additionally, ongoing issues at the Tengiz field in Kazakhstan also temporarily contributed to the rise in Brent prices. Production from the field has been reduced by approximately 30% this month due to ongoing maintenance and repair work. Although repairs are likely to be completed by November 23, previous estimates had called for a 20% reduction in production, with the higher figure a surprise.

Supply tightness won’t last

Both outages could support prices, but their impact is unlikely to be prolonged. And more U.S. oil, particularly light sweet, is expected to lead the market after Donald Trump is elected the country’s 47th president.

A Trump presidency, widely seen as pro-oil, will likely herald higher American production for 2025. As the United States continues to pump north of 13 million b/dlower oil demand next year and a potentially stronger dollar, crude prices could fall and Brent’s $70 floor may well be breached.

A big question for the market is: what will OPEC do next and how can it get out of this? If he curbs an increase in production or institutes further reductions, the benefits are unlikely to be as pronounced as he would like.

Even the most mundane price hike that any supply-restrictive measure might trigger will help non-OPEC producers, especially U.S. producers. cover their production at relatively higher prices to improve their margins. What’s more, OPEC is losing market share.

However, if it restores or increases production, prices could fall for longer, knocking some but not all competition out of the park, again with benefits that are questionable at best. Demand being what it is, 2025 is shaping up to be a year of relatively lower oil futures prices and a frustrating year for OPEC.