Oil Prices Nudge Higher Ahead of OPEC+ Meeting

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Dec 3 (Reuters) – Oil prices climbed nearly 1% on Tuesday, as investors hone in on the outcome of an OPEC+ meeting later this week.

Brent crude futures rose 76 cents, or 1.06%, to $72.59 a barrel by 1131 GMT, while U.S. West Texas Intermediate crude climbed 75 cents, or 1.1%, to $68.85.

OPEC+ is likely at its meeting on Thursday to extend its latest round of oil output cuts until the end of the first quarter, four OPEC+ sources told Reuters, to provide additional support for the oil market.

“Crude prices look well and truly stuck, with traders unwilling to engage ahead of Thursday’s OPEC+ meeting, the result of which may determine the direction – if any – ahead of year end,” Saxo Bank analyst Ole Hansen told Reuters.

OPEC+, which accounts for about half of the world’s oil production, has been looking to gradually unwind production cuts through 2025.

However, the prospect of an oil market surplus has exerted downward pressure on prices, with Brent trading nearly 6% below its average for December 2023.

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“Given a rise in compliance with production cuts from Russia, Kazakhstan, and Iraq, the lower Brent price level, and indications in press reports, we assume an extension of OPEC+ production cuts till April,” Goldman Sachs analysts said in a note.

“I think there’s no other option but to defer it,” Priyanka Sachdeva, a senior market analyst at Phillip Nova said, adding that mounting pressure from participant-nations to increase production could cap any extension at a couple of months.

The global oil demand outlook remains weak, with China’s crude imports likely to peak as early as next year, as demand for transport fuel begins to decrease, researchers and analysts said.

Saudi Arabia, the world’s top exporter, is expected to cut crude prices for Asian buyers to the lowest levels in at least four years, accordi