- OPEC and allies meet next week
- Brent and WTI still set for monthly gains
- Dollar set for biggest monthly rise since July
(London) REUTERS: Oil prices dipped yesterday in muted activity because of the U.S. Thanksgiving holiday while OPEC watchers expect an extension to a pact to throttle oil output but no deeper cuts to be agreed by the producer group and its allies next week.
Brent crude futures were down 29 cents at US $ 63.58 a barrel by 1043 GMT, heading for their biggest monthly gain since April with a rise of
about 5.6 percent.
West Texas Intermediate (WTI) futures were flat at US $ 58.11, tracing back earlier losses and on course for a fourth consecutive weekly increase. On a monthly basis, WTI is poised for a jump of about 7.3 percent, its highest since June.
The dollar is poised to register its strongest month since July, making it more expense to buy oil. Next week’s meeting of the Organisation of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, is also on investors’ radar.
“We don’t get any strong bullish impulses for the OPEC meeting. They will continue the cuts and focus on compliance,” said SEB Chief Commodities Analyst Bjarne Schieldrop.
“We don’t see that they really need to cut more,” he added, pointing to forecast oversupply being counteracted by lower demand because of incoming regulations cutting marine use of high-sulphur crude.
The producer group has agreed to cut output by 1.2 million barrels per day through to March as U.S. output continues to climb to record levels.
“It is highly probable that the group will rollover the deal in its current form until at least the end of 2020, but we see limited scope for a new round of cuts,” Fitch Solutions said.
Russian oil companies on Thursday proposed to keep their output quotas unchanged, putting pressure on OPEC+ to avoid any major shift at the meeting over December 5-6.
Some countries have exceeded their quotas, making compliance a likely focus at a gathering that coincides with the planned announcement of the final pricing for oil giant Saudi Aramco’s initial public offering.
Oil prices were also pressured by China’s warning to the United States on Thursday that it would take “firm countermeasures” in response to U.S. legislation backing anti-government protesters in Hong Kong.
Investors are concerned that any such move by China would further delay a preliminary agreement to end a U.S.-China trade war that has held back growth in global economies and oil consumption.