Oil prices steady amid uncertainty over Opec output cuts

Beijing — Oil prices were little changed on Tuesday amid uncertainty over voluntary output cuts by oil cartel Opec+, continued tension in the Middle East and weak economic data from the US.

Brent crude futures ticked down 1c to $78.02 a barrel by 4.02am GMT, while US West Texas Intermediate crude futures were up 5c at $73.09 a barrel.

Comments by Saudi Arabia’s energy minister that Opec+ production cuts could continue past the first quarter of 2024 if needed lent some support to the market, said Kelvin Wong, senior market analyst for Asia pacific at Oanda.

Oil prices had declined in the previous trading session as traders doubted that supply cuts by Opec+ would have a significant impact, and as a stronger US dollar weighed on commodity prices in general, said CMC Markets analyst Tina Teng.

A stronger dollar typically makes oil more expensive for holders of other currencies, which could dampen oil demand.

Opec+ on Thursday agreed to voluntary output cuts totalling about 2.2-million barrels per day for the first quarter of 2024, led by Saudi Arabia rolling over its current voluntary cut. At least 1.3-million barrels per day of those cuts, however, were an extension of voluntary curbs that Saudi Arabia and Russia already had in place.

Resumption of fighting in the Israel-Hamas war, however, stoked supply concern, as did attacks on three commercial vessels in international waters in the southern Red Sea. Those incidents followed a series of attacks in Middle-Eastern waters since war broke out between Israel and Palestinian militant group Hamas on October 7.

Data on Tuesday showed US factory orders fell by more than analysts expected in October and the most for over three years, dampening oil market sentiment. That bolstered the view that high interest rates are beginning to limit spending, analysts said.

Reuters