Brent oil largely unmoved awaiting Opec+ meeting

London — Brent crude futures were steady on Friday as traders kept their powder dry ahead of an Opec+ meeting that could bring agreement on further supply cuts.

Brent crude futures were down 8c, or 0.1%, at $81.34 a barrel by 9.13am GMT, having settled 0.7% down in the previous session.

US West Texas Intermediate crude lost 70c, or 0.91%, from Wednesday’s close to $76.40. There was no settlement for WTI on Thursday owing to a US public holiday.

Both contracts were on track to register for their first weekly gain in five weeks, supported by some hope that the Saudi-led Opec+ producer group could reduce supply to balance the market into 2024.

Opec+ surprised the market with an announcement on Wednesday that it would postpone a ministerial meeting by four days to November 30 after producers struggled to reach a consensus on production levels.

“The most likely outcome now appears to be an extension of existing cuts,” IG analyst Tony Sycamore wrote in a note.

The surprise delay had initially brought Brent futures down as much as 4% and WTI by as much as 5% in Wednesday’s intraday trading.

Trading remained subdued because of the Thanksgiving holiday in the US.

The near-term economic outlook in China, meanwhile, supported market sentiment.

Recent Chinese data and fresh aid to the indebted property sector can be “positive for the oil market’s near-term trend”, said CMC Markets analyst Tina Teng.

Yet those gains could be capped by higher US crude stockpiles and poor refining margins, leading to weaker demand from US refineries, analysts said.

“Fundamentals developments have been bearish with rising US oil inventories,” ANZ analysts said in a note.

China’s longer-term outlook is lukewarm, however. Analysts say oil demand growth could weaken to about 4% in the first half of 2024 as the property sector crunch weighs on diesel use.

Non-Opec production growth is set to remain strong, with Brazilian state energy company Petrobras planning to invest $102bn over the next five years to boost output to 3.2-million barrels of oil equivalent per day by 2028, up from 2.8-million in 2024.

Reuters