(Bloomberg) -- With OPEC+ set to make a pivotal decision on production policy, oil prices remain resolutely rangebound, even with a second Trump presidency imminent and risks remaining in the Middle East and Ukraine.
A gauge of US crude market volatility fell to its lowest level since August in recent days. That comes with prices trading in a band of about $6 a barrel since the middle of October, as benchmark West Texas Intermediate bounces around $70 a barrel.
Despite a raft of uncertainties ahead, crude has been constrained by competing forces — expectations for oversupply in 2025 vying with a market that in the very near-term is showing pockets of tightness.
Prices have also lost the geopolitical risk premium that bolstered the market when Iran and Israel exchanged attacks in the autumn. Instead, traders have grown resigned to rangebound numbers as they await OPEC+'s next output moves — to be announced on Thursday — and firmer signs of what a Donald Trump presidency, from foreign policy to trade tariffs, will mean for prices.
“The market is rangebound,” said Tamas Varga, an analyst at brokerage PVM. “Everyone is undecided, no one knows where the market should go.”
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