The oil market is currently on edge as traders await news from OPEC+ regarding potential further production cuts. Brent crude futures inched down on Friday, extending losses from the previous session, as speculation grows about whether OPEC+ will agree on additional cuts.
Brent crude futures slipped by 6 cents, or 0.07%, to $81.36 at 0400 GMT after settling down 0.7% in the previous session. Similarly, U.S. West Texas Intermediate crude slid by 66 cents, or 0.86%, to $76.44, from its Wednesday close. Both contracts are on track to mark their first weekly rise in five, as expectations mount that OPEC+, led by Saudi Arabia, could reduce supply to balance the markets into 2024.
However, the surprise delay of the OPEC+ ministerial meeting has caused volatility in the markets. The delay had initially brought Brent futures down by as much as 4% and WTI by as much as 5% in Wednesday’s intraday trading. This uncertainty, coupled with the U.S. Thanksgiving holiday, has led to subdued trading.
The near-term Chinese outlook appears stronger, with expectations of more stimulus being directed towards the property sector, supporting market sentiment. However, the gains might be limited by higher U.S. crude stockpiles and poor refining margins, potentially leading to weaker crude demand from U.S. refineries.
Looking ahead, analysts expect oil demand growth to weaken in China, particularly in the first half of 2024, as the country’s property sector struggles. Additionally, non-OPEC production growth is expected to remain strong, particularly with Brazilian state energy firm Petrobras planning a significant investment to boost output.
Overall, oil markets remain on edge as the industry awaits news from OPEC+ and monitors various factors that could impact supply and demand dynamics in the coming months.