Oil prices are rising ahead of the OPEC+ meeting

By Florence Tan and Colleen Howe

SINGAPORE (Reuters) – Oil prices rose on Tuesday but remained within a tight trading range as traders awaited the outcome of an OPEC+ meeting later this week.

Brent crude futures rose 31 cents, or 0.4%, to $72.14 a barrel by 0704 GMT, after falling 1 cent in the previous session. U.S. West Texas Intermediate crude rose 26 cents, or 0.4%, to $68.36, after gaining 10 cents on Monday.

Producers’ group sources said it would extend its latest round of production cuts until the end of the first quarter at its meeting on December 5.

“Given increasing compliance with production cuts from Russia, Kazakhstan and Iraq, lower Brent price levels and indications in press reports, we expect OPEC+ production cuts to be extended through April,” analysts at Goldman Sachs said in a note.

OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, has sought to reverse production cuts by the first quarter of 2025. However, the prospect of oversupply has put pressure on prices. The group accounts for around half of global oil production.

“I think there is no option but to postpone it,” said Priyanka Sachdeva, senior market analyst at Phillip Nova, adding that it could only last for about a month as there is a lot of pressure from participating countries to to ramp up the pace issue.

Given the lack of bullish catalysts and weak demand, Sachdeva expects oil prices to move in a limited range, with a downward bias.

The consumption outlook remains weak as China’s crude oil imports are expected to peak as early as next year as demand for transportation fuel for the world’s biggest crude buyer begins to fall, researchers and analysts said, further widening the gap between demand and supply.

Saudi Arabia, the world’s biggest exporter, is expected to cut crude oil prices for Asian buyers to their lowest level in at least four years, traders said.

Fears that the Federal Reserve might not cut interest rates at its December meeting have also capped oil prices and offset positive signals from China, where the purchasing managers’ index rose to a seven-month high in November.

Oil prices on both sides of the Atlantic fell more than 3% last week.

Federal Reserve Governor Christopher Waller, whose views are often a determinant of U.S. monetary policy, said he was inclined to support another rate cut this month, but Atlanta Federal Reserve President Raphael Bostic stood his ground pointed out that the Fed still had to take the upcoming labor market data into account.

The story continues