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Oil swung as traders wrestled with the prospects that OPEC and its allies will deepen production cuts at a meeting this week.
US benchmark West Texas Intermediate pared gains to trade near $75 a barrel after earlier rising almost 1% on a Bloomberg report that Saudi Arabia is asking others in the OPEC+ coalition to reduce their oil-output quotas. The Organization of Petroleum Exporting Countries pushed back its gathering by four days to Nov. 30 amid a dispute over output quotas.
Oil earlier fell as much as 2% on data showing profits at China’s industrial companies rose at a much slower pace in October, highlighting risks to growth in the world’s largest crude importer.
On the supply side, a Black Sea storm left half a million people without power in Crimea and halted crude loadings at Russia’s Novorossiysk and the CPC terminal. Kazakhstan, which uses CPC for the bulk of its seaborne crude exports, saw oil output on Nov. 26 drop 15% from the day before, according to the nation’s energy ministry. If weather permits, loadings at Novorossiysk may resume on Tuesday.
Prices:
- WTI for January delivery was little changed at $75.16 a barrel at 10:56 a.m. in New York.
- Brent for January settlement fell 0.3% to $80.32 a barrel.
WTI has dropped by almost 20% from a high in late September as supplies increased from non-OPEC+ countries and the Israel-Hamas war’s risk premium faded. The International Energy Agency forecast earlier this month that the market would tip back into surplus next year.
Crude is stuck in a holding pattern after the delay “increased both uncertainty and expectations, which is a dangerous cocktail for traders,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth. “Real money wants to see if the OPEC put is still in place and get a better feel for how 2024 will shape up before getting back involved.”
Trading action is hard to gauge as positioning remains light and risk appetite wanes, she added.
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