Oil Steady Ahead of Key OPEC+ Production Talks

 

Oil prices remained largely unchanged on Thursday as investors awaited an OPEC+ meeting later in the day, monitoring potential actions on supply cuts and geopolitical developments in the Middle East.

Brent crude futures rose by 6 cents, or 0.08%, to $72.37 per barrel, while U.S. crude futures gained 7 cents, or 0.10%, reaching $68.61 a barrel. Both benchmarks fell by nearly 2% on Wednesday, partly due to a large sale of U.S. oil futures by a single bank in afternoon trading, which pushed prices down.

OPEC+ is expected to extend its current oil production cuts by at least three months, starting in January, when it meets online later on Thursday. The group aims to support the oil market amid ongoing supply adjustments. 

While OPEC+ has been trying to phase out cuts next year, market participants are eager to see whether the group will continue to focus on boosting prices through extended cuts or ease the restrictions to protect its market share. Some analysts suggest that OPEC+ may take a short-term action, but overall, oil prices are expected to rise by year-end due to hopes of a U.S. economic recovery and continued tensions in the Middle East.

Investors are cautious, awaiting OPEC+’s decision, and some are pricing in the possibility that the group may not deliver the expected outcome. There is also concern that an anticipated increase in oil production under a Trump administration in 2025 could make it more difficult for OPEC+ to support prices.

A larger-than-expected draw in U.S. crude stocks last week helped support prices. According to the Energy Information Administration (EIA), U.S. crude stockpiles fell as refiners increased operations, while gasoline and distillate stockpiles saw bigger-than-expected gains.

In the Middle East, Hezbollah's military capabilities have been significantly weakened by Israel, but the Iran-backed group is expected to try to rebuild its forces and pose a long-term threat to the U.S. and its allies. Israel has warned that it would resume its war with Hezbollah if the truce breaks down.

Meanwhile, Donald Trump's Middle East envoy is visiting Qatar and Israel to help negotiate a ceasefire and a hostage release deal ahead of his inauguration on January 20.

 

 

 

 

 

 

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author.