Crude Oil Closes: Weighing the Prospects of OPEC+ Production Cuts, Crude Oil Closes Lower, New York Crude Oil Hits a Two-Week Low – Mobile Finance

Crude oil closes: Weighing the prospects of OPEC+ production cuts, crude oil closes lower, New York crude oil hits a two-week low

financial

2023-11-28 05:26:58

According to news from the financial world on November 28, crude oil futures ended slightly lower as traders weighed the prospects of further production cuts when the Organization of the Petroleum Exporting Countries and its allies meet later this week.

West Texas Intermediate crude oil futures for January delivery on the New York Mercantile Exchange fell 68 cents, or 0.9%, to settle at $74.86 a barrel, falling for the fourth consecutive session and the lowest level since November 16. Brent crude oil, the global benchmark, fell $0.60, or 0.7%, to $79.98 a barrel on ICE Futures Europe, having fallen as low as $79.13 during the session. The most actively traded February Brent crude oil futures fell 61 U.S. cents, down 0.8% to $79.87 a barrel.

December gasoline rose 0.7% to $2.18 per gallon; December heating oil rose less than 0.1% to $2.84 per gallon; natural gas prices for December delivery fell 2.1% to close at $2.79 per million British thermal units. The contract expires on Tuesday.

OANDA senior market analyst Craig Erlam said in market commentary that the OPEC+ meeting may be the most influential event this week, “not only because any decision is likely to have a direct impact on prices and inflation, but also because the meeting has been delayed by four days. “There are obviously some divisions within the league.”

Oil prices plunged midweek last week after OPEC+ postponed its meeting from Nov. 26 to Nov. 30, fueling speculation about a possible rift. Front-month West Texas Intermediate crude fell 0.7% last week, while January Brent crude fell 3 cents, or less than 0.1%. This was the fifth consecutive week of declines for the two major benchmark stock indexes.

Subsequent news reports said the meeting was postponed as OPEC members Angola and Nigeria demanded higher production levels, allaying concerns about deepening disagreements that could threaten continued production cuts next year, including a 1 million barrel per day cut by Saudi Arabia. .

Phil Flynn, senior market analyst at Price Futures Group, said this raised concerns that Saudi Arabia could abandon voluntary production cuts “thus flooding the global oil market.”

At the same time, the postponement of the meeting has led bearish traders to believe that OPEC+ will find it difficult to further cut production.

Chris Weston, head of research at Australian brokerage Pepperstone, said in a note: “Expectations for further production cuts are low, with most commodity strategists seeing a risk that current production cuts will be extended into 2024. Higher.” As of Monday afternoon, CME Group’s OPEC Watch Tool showed a 67.77% chance of unchanged oil production levels on Nov. 30 and a 24.77% chance of an increase. This tool calculates the likelihood of certain potential outcomes from the next OPEC meeting.

“OPEC+ could certainly shock the market, but judging by crude oil price action, the market appears to be shorting Brent crude ahead of the meeting and betting that OPEC+ will not step up efforts to reverse the recent bear market trend,” Weston said.

On the New York Mercantile Exchange, natural gas prices pared some earlier losses in the day’s settlement and the market is “fragmented right now,” Price Futures Group’s Flynn said.

“With cooler temperatures on the one hand, we will see inventories decline this week,” he said in a daily report. On the other hand, production continues to be strong, keeping us above the five-year moving average. The key to this market will continue to be whether the weather continues to be cold. If so, the market will go up, if not, the market will go down. “