Nov 22 (The Street Press) – On Wednesday, before the U.S. Thanksgiving holiday, oil prices didn’t change much. The market was quiet as everyone waited for updates on whether the OPEC+ group would reduce their oil production and to confirm if there was a significant increase in U.S. crude stocks.
Brent crude futures went up by 14 cents (0.17%) to reach $82.59 per barrel at 0800 GMT. Meanwhile, U.S. West Texas Intermediate crude futures also saw a 13-cent increase (0.17%) and reached $77.90.
Both benchmarks have experienced a drop for four consecutive weeks. Last week, concerns about the demand for oil increased, leading to further weakening of prices. Investors are exercising caution in anticipation of the OPEC+ meeting scheduled for Sunday. During this meeting, the producer group might consider intensifying supply cuts in response to the slowing global economic growth.
This Monday, both contracts saw an increase of around 2%. This boost followed reports from three OPEC+ sources telling Reuters that the group, including the Organization of the Petroleum Exporting Countries (OPEC) and allied producers, is likely to discuss additional oil supply cuts during its meeting on November 26.
“The upcoming meeting has been the key central focus for oil prices for now, with sentiments shrugging off the sharp build in U.S. crude inventories,” explained Jun Rong Yeap, a market strategist at IG.
Analysts anticipate that OPEC+ may extend or intensify oil supply cuts into the next year. According to ANZ analysts, the market consensus points to Saudi Arabia and Russia extending voluntary cuts into 2024, but the impact will depend on additional cuts by other members.
Despite potential extensions, the head of the International Energy Agency’s oil markets and industry division mentioned on Tuesday that even with OPEC+ actions, the global oil market is expected to have a slight supply surplus in 2024.
In the week ending Nov. 17, U.S. crude stocks surged by approximately 9.1 million barrels, as reported by market sources citing figures from the American Petroleum Institute on Tuesday. During the same period, gasoline inventories decreased by around 1.79 million barrels, and distillate inventories saw a decline of about 3.5 million barrels.
Official U.S. government data on stockpiles is expected on Wednesday. Additionally, it’s important to note that Thursday is a public holiday in the United States.