Oil prices fell on Monday, with the Brent benchmark hovering around $80 a barrel as investors awaited this week’s Opec+ meeting and expected curbs on supplies into 2024.
Brent crude futures were down 37 cents, or 0.4 per cent, at $80.21 a barrel by 1633 GMT, while US West Texas Intermediate (WTI) crude futures lost 29 cents, or 0.4 per cent, to $75.25. Both contracts lost $1 in early trading.
Prices tumbled midweek when Opec+ — the Organization of the Petroleum Exporting Countries (Opec+) and allies including Russia — postponed to November 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 and Opec+ is looking at deepening oil production cuts despite its policy meeting being postponed to this Thursday, an Opec+ source said on Monday.
“Although there are headlines that Saudi has made progress reaching consensus, there is limited risk appetite to buy crude ahead of the formal announcement,” said Rebecca Babin, senior energy trader at CIBC Private Wealth US.
“Until we get clarity on how this plays out, expect crude to struggle to rally,” she added.
ING analysts said 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 cuts.
“Clearly, if we do not see this, it would put further downward pressure on the market,” they 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.