Oil Prices Edge Up Ahead of OPEC+ Meeting
Oil prices rose nearly 1% on Tuesday as investors wait for the outcome of an OPEC+ meeting later this week. Brent futures increased 76 cents, or 1.06%, to $72.59 a barrel, while U.S. West Texas Intermediate crude gained 75 cents, or 1.1%, to $68.85.
Analysts expect OPEC+ to extend its latest round of oil output cuts until the end of the first quarter to provide additional support for the oil market. This comes as the global oil demand outlook remains weak, with China’s crude imports likely to peak as early as next year as demand for transport fuel begins to decrease, according to researchers and analysts.
Saudi Arabia, the world’s top exporter, is expected to cut crude prices for Asian buyers to the lowest levels in at least four years, according to traders. Additionally, concerns that the U.S. Federal Reserve may not cut rates at its December meeting have capped oil prices. Saxo Bank analyst Ole Hansen noted that crude prices appear “well and truly stuck” and that traders are unwilling to engage ahead of the OPEC+ meeting, which may determine the direction of oil prices before the end of the year.
Goldman Sachs analysts predict that OPEC+ will extend its production cuts until April, while senior market analyst Priyanka Sachdeva believes that there is no option but to defer the cuts due to mounting pressure from participant-nation increases.