LONDON – Oil prices fell on Monday, with the Brent benchmark dropping near $80 a barrel as investors awaited this week’s OPEC+ meeting and expected curbs on supplies into 2024. Brent crude futures LCOc1 were down 35 cents, or 0.4%, at $80.23 a barrel by 1447 GMT. U.S. West Texas Intermediate (WTI) crude futures CLc1 lost 29 cents, or 0.4%, to $75.25.
Source: Reuters
Both contracts lost $1 in early trading, after having registered their fifth weekly decline in a row last week.
Prices tumbled midweek when OPEC+ – the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia – postponed to Nov. 30 a ministerial meeting to iron out differences on production targets for African producers.
Since then the group, helmed by de facto leader Saudi Arabia, has moved closer to a compromise, four OPEC+ sources told Reuters on Friday.
OPEC+ is still negotiating ahead of an oil policy meeting on Thursday, sources said on Monday.
ING analysts said market sentiment remains negative given the dispute within OPEC+ over production quotas, though they expect Saudi Arabia to roll over its additional voluntary cut of 1 million barrels per day (bpd) into next year, and Russia to extend its own cuts.
“Clearly, if we do not see this, it would put further downward pressure on the market,” ING analysts said in a note.
Estimated exports by OPEC countries have declined to 1.3 million bpd below levels in April, Goldman Sachs analysts said in a note, in line with the group’s supply targets.
“We still expect an extension of the unilateral Saudi and Russia cuts through at least the first quarter of 2024,” the bank added.
The United Arab Emirates, however, is poised to ramp up exports of Murban crude early next year, according to traders and Reuters data.
In the United States, higher crude stockpiles could also put downward pressure on prices, analysts have said.
Meanwhile, efforts by Iraq to resume northern crude exports via Turkey are ongoing. Iraqi oil officials will meet representatives of international oil companies and Iraqi Kurdish officials in early December to discuss contract changes central to the issue, a deputy minister said.
The International Energy Agency said it expects a slight surplus in global oil markets in 2024 even if OPEC+ nations extend their cuts into next year.
Commonwealth Bank analyst Vivek Dhar said: “With the IEA forecasting that global oil demand will only grow 0.9 million bpd next year, down from 2.4 million bpd growth in 2023, OPEC+ will have to show significant supply discipline, or at least jawbone such ability, to alleviate market worries of a deep surplus in oil markets next year.”
Oil prices have also stabilised after geopolitical tensions dialled down in the Middle East following a ceasefire in Gaza and an exchange of hostages.
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