Crude costs remain stable prior to the OPEC+ crude production decision.
Brent crude futures remained elevated above $81 per barrel on Friday, with traders maintaining a reticent stance in anticipation of the OPEC+ meeting the following week. This gathering potentially culminates in a resolution regarding output reductions in 2024.
Crude costs remain stable prior to the OPEC+ crude production decision. As of 12:27 GMT, Brent crude futures were up 22 cents at $81.64 per barrel, following a 0.7% decline in the previous session.
US West Texas Intermediate crude fell to $76.40, a decrease of 45 cents from Wednesday’s close. On Thursday, WTI did not reach a settlement due to a United States public holiday.
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Both contracts were poised to record their first weekly increase in five weeks as OPEC+ prepares for a meeting where output reductions will be a major topic of discussion in response to recent oil price declines caused by concerns about demand and an expanding supply, especially from non-OPEC producers.
The OPEC+ coalition, which consists of Russia and the Organization of the Petroleum Exporting Countries (OPEC) as well as its allies, unexpectedly informed the market on Wednesday that its November meeting would be held.
The November 30 meeting was rescheduled from November 26 due to the inability of producers to agree on production levels. “An extension of existing cuts appears to be the most probable outcome at this time,” said IG analyst Tony Sycamore.
Brent futures fell as much as 4% and WTI futures fell as much as 5% in intraday trading on Wednesday due to the unexpected delay.
During the Thanksgiving holiday on Thursday, commerce remained subdued in the United States. An area of optimism emerged in the shape of the immediate economic prospects in China.
CMC Markets analyst Tina Teng opined that recent Chinese data and new assistance to the indebted property sector could be “positive for the near-term trend of the oil market.”
However, analysts caution that higher crude stockpiles in the United States and poor refining margins could limit those gains and result in weakened demand from American refineries.
ANZ analysts wrote in a note, “Fundamental developments have been bearish due to rising US oil inventories.” China maintains a lukewarm outlook for the foreseeable future.
Analysts estimate that in the first half of 2024, oil demand growth could decelerate to around 4% due to the impact of the real estate downturn on diesel consumption.
Brazilian state energy company Petrobras intends to invest $102 billion over the next five years to increase output from 2.8 million barrels of oil equivalent per day (boepd) in 2024 to 3.2 million boepd by 2028, indicating that non-OPEC production growth will continue to be robust.
