Oil prices are on the rise, despite facing a potential third consecutive week of decline, as concerns over slowing demand and a crucial meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies loom. Brent crude futures for January increased 1.1 percent to $80.85 per barrel, while U.S. West Texas Intermediate (WTI) crude futures for December saw a 1 percent rise to $76.52 per barrel.
The current trajectory suggests that both contracts are poised to experience a 5 percent decrease for the week. Commerzbank analysts noted that apprehension surrounding demand has superseded fears of production disruptions associated with the Middle East conflict.
The concerns over demand were heightened by recent weak economic data from China, which raised worries of a decline in consumption. Furthermore, Chinese refiners, who are major buyers of crude oil from Saudi Arabia, have requested reduced supply from the largest exporter in the world for December.
The pivotal meeting of OPEC and its allies, including Russia, is scheduled for November 26, and all eyes are on the outcome as it will determine the group’s next move on production. Of particular interest is whether Saudi Arabia will extend its voluntary cut of 1 million barrels per day, which is set to expire at the end of this year.
RBC Capital Markets analyst Helima Croft believes the likelihood of Saudi Arabia prolonging the cut into the first quarter of 2024 is growing, citing renewed market concerns about Chinese demand and the broader macroeconomic outlook.
Citi analysts expressed a more optimistic view, stating that they anticipate the downward pressure on oil prices to ease and foresee a recovery after reaching their lowest levels since July earlier this week. They pointed to factors such as refinery maintenance easing and a shift in the risk-reward dynamics for investors following the recent sell-off as potential sources of support for prices in the near term.
As the OPEC+ meeting approaches, market participants eagerly await the decision that will shape the future direction of oil production. While concerns over demand persist, the potential for extended cuts and other market factors could help stabilize prices in the coming weeks.
More detail via www.theepochtimes.com here… ( Image via www.theepochtimes.com )