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Oil prices sink as OPEC+ delays crucial meeting

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Oil prices took a hit on Thursday after the unexpected decision by OPEC+ to postpone a key policy meeting, indicating a growing rift within the alliance. Despite this, stock markets mostly traded higher, with European markets being boosted by positive business activity surveys for both Britain and the eurozone. The delay in the OPEC+ meeting caused crude prices to decline by one percent on Thursday, following a drop of nearly five percent the day before. The decision to postpone the meeting was reportedly made after Angola and Nigeria opposed lower production targets that were suggested by others. Saudi Arabia had been expected to extend their one-million-barrel-a-day output cut into the new year. The alliance between Saudi Arabia and Russia had previously implemented significant cuts to boost oil prices, which have been under pressure due to economic struggles in the US, Europe, and China.

Stephen Innes, an analyst at SPI Asset Management, commented that the delay in the OPEC+ meeting indicates a growing divide among producers. He also noted that with the increase in production from the US and non-OPEC countries, it is not surprising that producers are looking to pump more oil in order to maintain market share.

Despite Wall Street being closed for the Thanksgiving holiday, European and Asian markets saw mixed performance. In Europe, positive business activity surveys for Britain and the eurozone boosted sentiment. While the eurozone experienced a sixth consecutive month of decline in business activity, the rate of decline slowed compared to October. Britain, on the other hand, saw growth in the services sector, leading to an overall flat reading for the index.

In Asian trading, Hong Kong rebounded from earlier losses to edge higher in the afternoon. This was driven by reports that China is set to offer more support to the property sector, calling on banks to do more for the industry. However, other Asian markets, including Sydney, Singapore, Taipei, Manila, and Bangkok, experienced declines.

The performance of these markets followed data that showed an increase in inflation expectations among US consumers, with the University of Michigan reporting that consumers now expect inflation to be at 4.5 percent over the next year. Additionally, US jobless claims came in lower than forecasted, indicating that the labor market remains strong. The Federal Reserve has consistently stated that it will base its interest rate decisions on data, particularly inflation and jobs.

In terms of key figures, Brent North Sea crude was down 1.3 percent at $80.92 per barrel, while West Texas Intermediate was down 1.5 percent at $75.97 per barrel. The FTSE 100 in London rose by 0.2 percent, closing at 7,483.58 points. The CAC 40 in Paris and the DAX in Frankfurt also saw gains of 0.2 percent. The Hang Seng Index in Hong Kong closed 1.0 percent higher at 17,910.84, while the Shanghai Composite was up 0.6 percent at 3,061.86. The Nikkei 225 in Tokyo was closed for a holiday, and the Dow in New York was also closed for the Thanksgiving holiday. The euro strengthened against the dollar, while the pound weakened against the dollar.

More detail via EWN Traffic here… ( Image via EWN Traffic )

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