Oil prices mark time ahead of Sunday’s Opec+ meeting

Oil prices were confined to a narrow range on Wednesday in quiet trading ahead of the Thanksgiving holiday as the market awaited news on output cuts from Opec+ and looked for confirmation of a sharp increase in US crude stockpiles.

Brent crude futures rose 14cs, or 0.17%, to $82.59 a barrel by 8am GMT. West Texas Intermediate rose 13c, or 0.17%, to $77.90.

Both benchmarks have fallen for four straight weeks, and prices weakened further last week on growing concerns about the outlook for demand. Investors remained cautious ahead of Sunday’s scheduled Opec+ meeting, when the producer group may discuss deepening supply cuts due to slowing global economic growth.

On Monday, both contracts climbed about 2% after three Opec+ sources said the grouping was set to consider additional oil supply cuts when it meets on November 26.

“The coming meeting has been the key central focus for oil prices for now, with sentiments shrugging off the sharp build in US crude inventories,” said Jun Rong Yeap, a market strategist at IG.

Analysts have predicted that Opec+ is likely to extend and even add to oil supply cuts into next year. “While market consensus suggests Saudi Arabia and Russia will be extending voluntary cuts into 2024, any further cuts by other members will hold the key to future prices,” ANZ analysts wrote in a note.

Even if the Opec+ nations extend their cuts into next year, the global oil market will see a slight supply surplus in 2024, the head of the International Energy Agency’s oil markets and industry division said on Tuesday.

US crude stocks rose by almost 9.1-million barrels in the week ended November 17, according to market sources citing American Petroleum Institute figures on Tuesday. Petrol inventories dropped by about 1.79-million barrels, while distillate inventories fell by about 3.5 million barrels.

US government data on stockpiles is due later on Wednesday.

Reuters