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Crude oil prices crashed towards six-week lows on Tuesdat as the seemingly bad situation crude oversupply worsened from a statement previously.

Oil glut further mounted following a statement from Venezuela’s Oil Minister Eulogio Del Pino saying that global supplies required a decline of 10% or 94 million barrels per day in order to bring production down to consumption levels.

On Monday, Brent futures climbed higher after Venezuelan President Nicolas Maduri stated that oil producers—OPEC and non-OPEC members, were almost reaching an agreement to normalize the oil markets. Crude oil prices finished off the peak amid doubts over whether that deal could happen.

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OPEC meeting: What to expect

OPEC members, led by Saudi Arabia and other Middle East crude exporters, will meet non-OPEC producers led by Russia at informal talks in Algeria between September 26 and 28. Market experts are estimating odds that the conference would yield any agreement or action to decrease the global oil surplus seemed quite minimal.

Most experts deem that the producers would continue to watch the market and possibly delay freeze discussions to the official OPEC meeting in Vienna set on November 30.

Meanwhile, according to Algerian Energy Minister Noureddine Bouterfa, OPEC members may opt to hold an extraordinary meeting to talk about oil prices immediately after the informal conference next week.

Bouterfa told local radio he was positive that the members would reach a consensus on how to stabilize the oil markets at the Algiers meeting.

On a visit to Algiers over the weekend, Mohammed Barkindo, secretary-general of OPEC, said an extraordinary meeting may occur if the upcoming informal gathering created a consensus. He has also clarified that the Algiers meeting was for consultations, rather than decision-making.

Crude Oil Analysis

On the NYMEX, crude oil for November delivery hit a six-week low of $42.47 previously on Friday when signs of an ongoing recovery in US drilling activity arose. Another piece that weighs on prices is that the American Petroleum Institute is scheduled to publish its weekly report later in the day. Meanwhile, data from the Energy Information Administration is set to be released Wednesday.

Market participants had their attention from the increased US drilling activity concerns to the said weekly report. For additional trading hints, the market is also monitoring the outcome of the Federal Reserve and Bank of Japan policy meetings on Wednesday.

As of 14:15 GMT, crude oil futures are down 0.71% to $43.55. On the daily time frame of the crude oil futures chart, the Bollinger bands are seemingly indicating a downward trend.

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This is further supported by the trend line starting August 3, where it follows a bullish trend. However, this direction has proved to go downwards after the false breakout on August 19—a bearish candle on August 22 that started the bearish line. We can tell that the bullish trend line has then weakened and we can expect that the only way now is down. A number of doji stars are also found, including the current candle, which also indicates indecision, and most importantly, that the trend is weakening.

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