Oil Markets Remain in Tight Range Ahead of OPEC+ Meeting

 

Oil prices remained largely unchanged on Tuesday, trading within a narrow range as traders awaited the outcome of an OPEC+ meeting later this week.

Brent crude futures rose by 14 cents, or 0.19%, to $71.97 per barrel by 0404 GMT, following a slight 1-cent drop the previous session. U.S. West Texas Intermediate crude gained 8 cents, or 0.12%, to $68.18, after a 10-cent increase on Monday. Analysts at ANZ noted that investors were in a "wait-and-watch" mode ahead of the OPEC+ meeting.

Sources within OPEC+ indicated that the group is likely to extend its current production cuts until the end of the first quarter during its Dec. 5 meeting. OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies like Russia, had been considering unwinding production cuts by the first quarter of 2025. However, concerns about potential surplus supply have pressured oil prices. The group controls about half of the world's oil production.

Priyanka Sachdeva, a senior market analyst at Phillip Nova, suggested that the extension of cuts is likely, possibly for just a month, due to pressure from member nations to increase output. Without strong demand drivers and in the absence of bullish catalysts, Sachdeva expects oil prices to remain within a narrow range, with a downward bias.

The outlook for oil consumption remains weak, with China’s oil demand expected to peak as soon as next year, worsening the supply-demand imbalance. Saudi Arabia, the world’s largest oil exporter, is also expected to lower crude prices for Asian customers to their lowest levels in at least four years, according to traders.

Concerns that the U.S. Federal Reserve may hold off on rate cuts at its December meeting have also capped oil prices, counteracting some positive signals from China, where the purchasing managers' index rose to a seven-month high in November. Oil prices on both sides of the Atlantic fell over 3% last week.

Federal Reserve Governor Christopher Waller, who is often seen as a key indicator of U.S. monetary policy, expressed support for another rate cut this month. However, Atlanta Federal Reserve President Raphael Bostic argued that the Fed still needs to consider upcoming job data before making any decisions.

In the Middle East, a U.S.-brokered ceasefire between Israel and Hezbollah continued to face challenges, with nine people killed in strikes on two southern Lebanese towns after Hezbollah launched missiles at an Israeli military position in the disputed Shebaa Farms area on Monday.

 

 

 

 

 

 

 

 

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