Benchmark oil prices continued to fall on Friday.
The postponement of the OPEC+ ministerial meeting has brought some nervousness to the market. However, experts believe that the postponement will not affect the outcome of the meeting, MarketWatch reports. Citi analysts expect that Saudi Arabia will extend its voluntary production cap by 1 million bpd for the first quarter of 2024, while other countries will generally promise to adhere to the established quotas by the end of the year.
UBS experts also predict that the cartel will reach an agreement on production caps. At the same time, they expect oil prices to remain volatile in the near future.
Quotations of January futures for Brent crude oil on the London ICE Futures exchange as of 6:58 a.m. amounted to $81.33 per barrel, which is $0.09 (0.1%) lower than the price at the close of the previous session. On Thursday, these contracts fell by $0.54 (0.7%) to $81.42 per barrel.
The price of January futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $0.7 (0.9%) to $76.42 per barrel in the morning. The main session on Thursday was not held due to the Thanksgiving Day celebrations in the United States.
Benchmark oil prices are declining on Thursday morning after falling the day before on the news of the postponement of the OPEC+ ministerial meeting and a sharp rise in US stockpiles.
January futures for Brent on the London ICE Futures exchange by 7:06 a.m. fell by $0.98 (1.2%) to $80.98 per barrel. On Wednesday, these contracts dropped by $0.49 to $81.96 per barrel, and during the session reached $78.41 per barrel.
Quotations for January futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time decreased by $0.83 (1.08%) to $76.27 per barrel. At the end of the previous session, they dropped by $0.67 to $77.1 per barrel, the intraday low was $73.79 per barrel.
Market activity was reduced due to the Thanksgiving holiday in the United States.
On Wednesday, it became known that the OPEC+ ministerial meeting was postponed from November 26 to November 30. The OPEC conference meeting previously scheduled for November 25 has also been postponed to November 30, the organization said.
Bloomberg reported that OPEC+, which had planned a meeting for this weekend, seems to have run into problems as Saudi Arabia expressed dissatisfaction with other member states over production levels.
According to unnamed delegates, as of Wednesday morning, it looked like the OPEC+ conference might be postponed indefinitely. Saudi Arabia, which has been cutting production by an additional 1 million barrels per day since July, was in difficult negotiations with other members over production levels, the delegates said, asking not to be identified because the talks were private.
According to Rystad Energy, in the absence of further production cuts, oil prices will remain around $80 per barrel next year.
The company notes that meetings of the OPEC+ Ministerial Committee have never been postponed for four days. However, an agreement on production cuts will be reached at the upcoming meeting, Rystad expects, while not ruling out the possibility of a deadlock in the negotiations.
Meanwhile, commercial oil stocks in the United States increased by 8.701 million barrels last week, according to the weekly report of the country’s Energy Ministry published the day before. Gasoline inventories for the week ended November 17 increased by 749 thousand barrels, while distillate stocks decreased by 1.018 million barrels.
Experts surveyed by Trading Economics expected an average increase in crude oil stocks by 1.16 million barrels, a decrease in gasoline stocks by 150 thousand barrels and a decrease in distillate stocks by 761 thousand barrels.
Inventories at the Cushing terminal, where NYMEX-traded crude is stored, increased by 858 thousand barrels over the week.
Benchmark oil prices are little changed on Wednesday morning.
The price of January futures for Brent on the London ICE Futures exchange at 7:02 a.m. is $82.42 per barrel, which is 3 cents lower than at the close of the previous session. On Tuesday, these contracts rose in price by 13 cents to $82.45 per barrel.
Quotes for January futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time fell by 1 cent to $77.76 per barrel. At the end of the previous session, they fell by 6 cents to $77.77 per barrel.
Market participants are waiting for the OPEC+ meeting to take place next weekend. Earlier, the Financial Times wrote, citing sources, that the meeting may consider extending the current restrictions on oil production that expire at the end of the year or a sharper reduction in fuel production.
“We think the group has room to increase production cuts, but we believe Saudi Arabia will insist that other countries share the burden,” wrote RBC Capital analyst Helima Croft.
In addition, investors are evaluating signals about changes in energy reserves in the United States. According to the American Petroleum Institute (API), last week, US stocks jumped by almost 9.1 million barrels.
Official data from the Energy Ministry will be published at 17:30 on Wednesday.
Trading activity in the oil market is likely to be lower at the end of the week due to the Thanksgiving holiday in the US.
Benchmark crude oil prices are rising on Monday morning after a jump last Friday.
The price of January futures for Brent on the London ICE Futures exchange at 7:11 a.m. was $81.16 per barrel, which is $0.55 (0.68%) higher than at the close of the previous session. Last Friday, these contracts jumped in price by $3.19 (4.1%) to $80.61 per barrel.
Quotes for January futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) at the specified time increased by $0.53 (0.7%) to $76.57 per barrel. At the end of the previous session, they rose by $2.99 (4.1%) to $75.89 per barrel.
Due to the active rise on Friday, both brands minimized the weekly decline. Over the past week, Brent prices fell by 1%, WTI – by 1.7%.
The sharp rise in quotations on Friday was caused by rumors that OPEC+ could extend oil production cuts for several months or increase the volume of fuel production cuts.
“Anyone who has been trading oil for at least 10 years will remember the Thanksgiving Day shock of 2014 when OPEC abandoned production quotas and plunged prices from $80 to around $45 per barrel in a matter of weeks,” Sevens Report Research editor Tyler Ritchie told MarketWatch.
“The risks are now tilted in favor of the bulls, as tighter production restrictions will push futures back to $100 per barrel,” he added.
At the same time, data from the oilfield services company Baker Hughes showed that the number of oil rigs operating in the United States increased by six last week, the highest rate since February, and amounted to 500 units. The number of gas rigs, meanwhile, fell by four to 114, the lowest level since early September.
Benchmark oil prices are rising moderately on Wednesday morning, as investors assess US inflation data and await the weekly report on fuel stocks in the country.
The price of January futures for Brent on the London ICE Futures exchange at 7:10 a.m. is $82.7 per barrel, which is $0.23 (0.28%) higher than at the close of the previous session. On Tuesday, these contracts fell by 5 cents to $82.47 per barrel.
Quotes for December futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time increased by $0.18 (0.23%) to $78.44 per barrel. At the end of the previous session, they remained unchanged at $78.26 per barrel.
The rate of growth of consumer prices (CPI) in the United States in October decreased to 3.2% in annual terms from 3.7% in September, the Labor Department reported. Core inflation (CPI Core), which excludes food and energy prices, slowed to 4% from 4.1% a month earlier. The consensus forecast of experts surveyed by Trading Economics envisaged a weakening of inflation to 3.3% and a continued growth rate of the CPI Core index at 4.1%.
Data on inflation dynamics is closely monitored by the Federal Reserve System (FRS) when making decisions on monetary policy.
Meanwhile, the day before, the International Energy Agency raised its forecast for global oil demand growth in 2023 by 113 thousand barrels per day (bpd) to 2.367 million bpd. Thus, the organization expects global demand to reach 101.96 million bpd this year.
Market participants are also assessing signals about changes in energy reserves in the United States.
According to the American Petroleum Institute (API), last week the US stocks increased by 1.34 million barrels. A week earlier, reserves jumped by 11.9 million barrels.
Official data from the Energy Ministry will be published at 16:30 on Wednesday, and in two weeks at once. Analysts surveyed by Trading Economics predict that they will show an increase in oil reserves by 1.8 million barrels.
Oil prices are falling on Tuesday after a slight rise in the previous session amid decisions by Saudi Arabia and Russia to extend voluntary production cuts.
The cost of January futures for Brent crude oil on the London ICE Futures exchange as of 7:10 a.m. on Tuesday amounted to $84.77 per barrel, which is $0.41 (0.48%) lower than at the close of the previous session. On Monday, the price of these contracts rose by $0.29 (0.3%) to $85.18 per barrel.
December futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $0.36 (0.45%) to $80.46 per barrel by this time. As a result of the previous trading, the value of these contracts increased by $0.31 (0.4%) to $80.82 per barrel.
The market is under pressure from fears of a weakening global economy and, consequently, oil demand. “Weak economic expectations are holding back the oil market and justifying the position of OPEC+ countries limiting production,” OANDA analyst Craig Earlam said, as quoted by Market Watch.
Last weekend, it became known that Saudi Arabia decided not to change the volume of voluntary oil production cuts and will keep it at 1 million bpd until the end of 2023.
In December, Riyadh may review the parameters of the restrictions to make a decision either to deepen the reduction or to increase production, the Saudi state agency reported on Sunday, citing an official source in the country’s Energy Ministry.
Saudi state-owned Saudi Aramco said on Monday that it will keep the price of the main grade of oil supplied to Asia, Arab Light, unchanged in December. The price of this grade for Asian buyers has been rising for five months in a row.
The Russian Federation will extend until the end of December 2023 an additional voluntary reduction in the supply of oil and oil products to world markets by 300 thousand barrels per day, which came into effect in September and October 2023.
