Benchmark oil prices are little changed on Wednesday morning, as investors await a meeting of OPEC+ ministers.
The price of January futures for Brent on the London ICE Futures exchange at 7:15 a.m. is $81.68 per barrel, the same as at the close of the previous session. The day before, these contracts rose in price by $1.70 (2.1%) to $81.68 per barrel.
Quotes for January futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time increased by 15 cents to $76.56 per barrel. At the end of the previous session, they rose by $1.55 (2.1%) to $76.41 per barrel.
The meeting of OPEC+ ministers will be held online on November 30, although it was originally planned to hold the meeting in person in Vienna on November 26.
The future direction of oil prices largely depends on whether OPEC+ can “demonstrate continued unity within the group and commitment to stabilizing oil prices in the long term,” Sevens Report Research analysts wrote.
The OPEC+ countries are likely to extend the existing oil production restrictions with minimal changes until the end of the first quarter of 2024, according to Citi analysts. They estimate the probability of maintaining production at the same level at 60-70%, large-scale reductions in fuel supplies at about 20%, and an increase in production at 10-20%.
In addition, investors are studying signals about changes in energy reserves in the United States. According to the American Petroleum Institute (API), last week the US reserves decreased by 817 thousand barrels.
Official data from the US Department of Energy will be published at 17:30 on Wednesday.
Benchmark oil prices are moderately rising on Tuesday morning after declining a day earlier.
The price of January futures for Brent on the London ICE Futures exchange at 9:55 a.m. is $80.08 per barrel, which is 10 cents higher than at the close of the previous session. On Monday, these contracts fell by 60 cents (0.7%) to $79.98 per barrel.
Quotes for January futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time increased by 8 cents to $74.94 per barrel. At the end of the previous session, they fell by 68 cents (0.9%) to $74.86 per barrel.
Market participants remain focused on the meeting of OPEC+ ministers to be held on November 30, which was postponed from November 26, according to media reports, due to disagreements within the group.
The OPEC+ meeting will be the most important event this week “not only because any decision will have direct implications for prices and inflation, but also because the meeting has already been postponed for four days,” said Craig Earlam, senior analyst at OANDA.
Phil Flynn, senior analyst at Price Futures Group, warned that Angola and Nigeria’s desire to produce more oil, which was reported in the press, could irritate Saudi Arabia, and the country would refuse to voluntarily cut production, “flooding the global oil market.”
Market participants see a 68% probability that OPEC will not change its production target at the next meeting, and a 25% chance that it will be increased, according to the CME Group’s OPEC Watch Tool.
Oil prices continue to fall on Monday as traders await the meeting of OPEC+ ministers, which was postponed from November 26 to November 30.
The cost of January futures for Brent on the London ICE Futures exchange as of 7:20 a.m. amounted to $79.85 per barrel, which is $0.73 (0.91%) lower than at the close of the previous session. On Friday, the price of these contracts fell by $0.84 (1%) to $80.58 per barrel.
January futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $0.73 (0.97%) to $74.81 per barrel by this time. As a result of the previous trading, the value of these contracts fell by $1.56 (2%) to $75.54 per barrel.
Last week, Brent fell by less than 0.1%, WTI – by 0.7%, and both contracts ended in the red for the fifth week in a row.
According to media reports, the postponement of the OPEC+ ministerial meeting was due to disagreements within the group, in particular, the desire of Angola and Nigeria to increase production, while Saudi Arabia continues to voluntarily limit production.
These reports have eased traders’ fears of an even more significant reduction in OPEC+ production, Market Watch notes.
“Saudi Arabia is probably still ready to take on the lion’s share of the supply cuts needed to stabilize the oil market,” said Barbara Lambrecht, commodities analyst at Commerzbank. – “It therefore seems more or less obvious that the kingdom will continue to limit production in the first quarter, as the recent price decline has shown that it will suffer losses otherwise. The question is whether OPEC+ will be able to agree on additional cuts.”
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.
