Oil prices experienced a dip on Monday, with Brent crude nearing $80 a barrel, as investors kept a watchful eye on the upcoming OPEC+ meeting scheduled later this week. The meeting is anticipated to yield an agreement that will potentially curb oil supplies into 2024.
As of 09:01 GMT, Brent crude futures fell 42 cents, or 0.5%, to $80.16 a barrel, while U.S. West Texas Intermediate crude futures were at $75.05 a barrel, down 49 cents, or 0.7%. These movements follow a marginal uptick last week, marking the first weekly gain in five weeks.
The positive momentum was driven by expectations that major oil-producing nations, Saudi Arabia and Russia, might extend voluntary supply cuts into early 2024. Additionally, speculations arose that OPEC+ would explore plans to reduce output further.
However, the middle of the week saw a downturn in prices after the Organization of the Petroleum Exporting Countries (OPEC) and their allies, including Russia, postponed a crucial ministerial meeting to Nov. 30. The delay was attributed to unresolved differences among member nations, particularly concerning production targets for African producers.
In the aftermath of the postponement, there has been a perceptible shift towards a compromise within the OPEC+ group, according to four sources familiar with the matter.
ING analysts noted that despite a slight recovery, market sentiment remains negative due to the ongoing dispute within OPEC+ over production quotas. Nevertheless, they anticipate that Saudi Arabia will likely extend its additional voluntary cut of 1 million barrels daily into the coming year.
