Crude oil hovers at $80 a barrel as Opec+ prepares to meet
Oil prices continue to come under scrutiny as the eurozone prepares to publish inflation numbers for November later this week. Stock picture
Global crude oil prices fell, with the price of Brent crude hovering around $80 a barrel as investors awaited this week’s meeting of the producers group Opec+ and expected curbs on supplies next year.
Brent crude price fell to $80.20 a barrel which had tumbled last week when Opec+ — which includes the Organisation of the Petroleum Exporting Countries and allies including Russia — postponed to this Thursday a ministerial meeting to iron out differences on production targets for African producers.
Since then the group, helmed by de facto leader Saudi Arabia, has moved closer to a compromise, four Opec+ sources told Reuters last week, and Opec+ is looking at deepening oil production cuts despite its policy meeting being postponed, an Opec+ source has said.
“Although there are headlines that Saudi has made progress reaching consensus, there is limited risk appetite to buy crude ahead of the formal announcement,” said Rebecca Babin, senior energy trader at CIBC Private Wealth US.
Crude oil is stuck in a holding pattern after the delay “increased both uncertainty and expectations, which is a dangerous cocktail for traders” Ms Babin said. “Real money wants to see if the Opec put is still in place and get a better feel for how 2024 will shape up before getting back involved.”
“Until we get clarity on how this plays out, expect crude to struggle to rally,” she added.
Oil prices continue to come under scrutiny as the eurozone prepares to publish inflation numbers for November later this week.
European Central Bank president Christine Lagarde told MEPs on Monday that eurozone inflation pressures are easing but wage growth is still strong, so the ECB’s fight to contain price growth is not yet done.
ING analysts said they expect Saudi Arabia to roll over its additional voluntary cut of 1m barrels per day into next year, and Russia to extend its own cuts.
“Clearly, if we do not see this, it would put further downward pressure on the market,” they said in a research note.
Estimated exports by Opec countries have declined to 1.3m barrels a day below levels in April, Goldman Sachs analysts said in a note, in line with the group’s supply targets.
“We still expect an extension of the unilateral Saudi and Russia cuts through at least the first quarter of 2024,” the bank added.
Meanwhile, efforts by Iraq to resume northern crude exports via Turkey are ongoing. Iraqi oil officials will meet representatives of international oil companies and Iraqi Kurdish officials in early December to discuss contract changes central to the issue, a deputy minister said.
The International Energy Agency said it expects a slight surplus in global oil markets in 2024 even if Opec+ nations extend their cuts into next year.
Higher crude stockpiles in the US have also put downward pressure on prices, analysts said.
However, four analysts polled by Reuters estimated on average that crude inventories fell by about 2m barrels in the week to November 24.
- Reuters
