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Oil gained as anxieties surrounding a high-stakes OPEC+ meeting and signs that the Federal Reserve is done raising interest rates outweighed an increase in US crude stockpiles.
West Texas Intermediate swung in a roughly $1.50 range to settle below $78 a barrel, with pre-meeting jitters sparking choppy trading. Prices have firmed on expectations across markets that the Fed may start trimming borrowing costs next year and OPEC and its allies will extend or deepen cuts. However, WTI’s rally was limited by technical resistance at the 200-day moving average.
The price moves come ahead of a delayed OPEC+ meeting scheduled for Thursday, which is now virtual instead of in-person. The producer group is expected to set policy for 2024, but has yet to resolve a dispute over output quotas for some African members, according to delegates.
“The anxiety brewing in the crude market heading into tomorrow’s meeting is palpable,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth. “There have been some fundamental developments” elsewhere in markets, “but the shadow cast by the OPEC meeting supersedes all other data.”
Meanwhile, fresh government data showed that US crude stockpiles rose 1.6 million barrels last week, reaching the highest level since July. But, a rise in refinery runs helped stem losses in prices.
Oil remains on track for back-to-back monthly declines on increased supply from countries outside the Organization of Petroleum Exporting Countries, boosting pressure on the cartel and its allies to impose deeper output cuts. The International Energy Agency said earlier this month that the global crude market was on course to flip back into a surplus next year.
Prices:
- WTI for January delivery climbed 1.9% to settle at $77.86 a barrel in New York.
- Brent for January settlement rose 1.7% to settle at $83.10 a barrel.
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