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Oil prices steady ahead of OPEC+ oil production decision

  • OPEC+ meeting delayed to Nov. 30
  • Oil on track for first weekly gain in five weeks
  • Trading subdued after U.S. Thanksgiving holiday

LONDON, Nov 24 (Reuters) – Brent crude futures hovered above $81 a barrel on Friday as traders kept their powder dry ahead of next week’s OPEC+ meeting, which could bring some kind of agreement on output cuts in 2024.

Brent crude futures were up 22 cents at $81.64 a barrel by 1227 GMT, having settled 0.7% down in the previous session.

U.S. West Texas Intermediate crude were down 45 cents from Wednesday’s close, dropping to $76.40. There was no settlement for WTI on Thursday owing to a U.S. public holiday.

Both contracts were on track for their first weekly gain in five weeks as OPEC+ prepares for a meeting that will have output cuts high on the agenda after recent oil price declines on demand concerns and burgeoning supply, particularly from non-OPEC producers.

The OPEC+ group comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia surprised the market with an announcement on Wednesday by announcing that its Nov. 26 meeting would be postponed to Nov. 30 after producers struggled to reach a consensus on production levels.

“The most likely outcome now appears to be an extension of existing cuts,” said IG analyst Tony Sycamore.

The surprise delay had initially brought Brent futures down as much as 4% and WTI by as much as 5% in intraday trading on Wednesday. Trading remained subdued during Thursday’s Thanksgiving holiday in the United States.

A bright spot came in the form of the near-term economic outlook in China. Recent Chinese data and fresh aid to the indebted property sector can be “positive for the oil market’s near-term trend”, said CMC Markets analyst Tina Teng.

Yet those gains could be capped by higher U.S. crude stockpiles and poor refining margins, leading to weaker demand from U.S. refineries, analysts said.

“Fundamentals developments have been bearish with rising U.S. oil inventories,” ANZ analysts said in a note.

Still, China’s longer-term outlook remains lukewarm. Analysts say oil demand growth could weaken to about 4% in the first half of 2024 as the property sector crunch weighs on diesel use.

Non-OPEC production growth is set to remain strong, with Brazilian state energy company Petrobras planning to invest $102 billion over the next five years to boost output to 3.2 million barrels of oil equivalent per day (boepd) by 2028, up from 2.8 million boepd in 2024.

Reporting by Paul Carsten and Natalie Grover in London and Colleen Howe in Beijing
Editing by David Goodman

Our Standards: The Thomson Reuters Trust Principles.

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Paul is a Pulitzer Prize finalist, Selden Ring Award winner and Overseas Press Club runner-up for his investigations into abuses by the Nigerian military. Currently in London, he’s also been based in Nigeria, China and Thailand.
Contact: +447737338528

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