Oil Prices Steady Amid Voluntary Output Cuts, Middle East Tensions
An aerial view shows tugboats helping a crude oil tanker to berth at an oil terminal, off Waidiao Island in Zhoushan, Zhejiang province, China July 18, 2022. cnsphoto via REUTERS/File Photo
Beijing, Dec 5 (Reuters) – Oil prices held steady on Tuesday amid uncertainty over voluntary output cuts by the OPEC+ group of producers, tensions in the Middle East and weak economic data from the U.S.
Brent crude futures inched up 14 cents to $78.17 a barrel by 0735 GMT, while U.S. West Texas Intermediate crude futures rose 15 cents to $73.19.
Comments by Saudi Arabia’s energy minister that OPEC+ production cuts could continue past the first quarter of 2024, if needed, lent some price support, said Kelvin Wong, senior market analyst for Asia pacific at OANDA.
Oil prices had declined on Monday on doubts that OPEC+ supply cuts would have a significant impact, and as a stronger U.S. dollar weighed on commodity prices in general, said CMC Markets analyst Tina Teng.
A stronger dollar typically makes oil more expensive for holders of other currencies.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together known as OPEC+, agreed on Thursday to voluntary output cuts of about 2.2 million barrels per day (bpd) for the first quarter of 2024, led by Saudi Arabia rolling over its current voluntary cut.
At least 1.3 million bpd of those cuts, however, were an extension of voluntary curbs that Saudi Arabia and Russia already had in place.
Resumption of fighting in the Israel-Hamas war, however, stoked supply concern, as did attacks on three commercial vessels in international waters in the southern Red Sea.
Those incidents followed a series of attacks in Middle-Eastern waters since war broke out between Israel and Palestinian militant group Hamas on Oct. 7.
Data on Tuesday showed U.S. factory orders fell by more than analysts had expected in October and the most in over three years, raising concerns about the health of U.S. demand.
That bolstered the view the rise in interest rates was beginning to limit spending, analysts said.
Reporting by Emily Chow and Colleen Howe; Editing by Christopher Cushing and Neil Fullick
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