Brent moves lower ahead of OPEC+ meeting
The front-month ICE Brent contract has moved $1.31/bbl lower on the day, to trade at $72.51/bbl at 09.00 GMT.
PHOTO: Getty Images
Upward pressure:
Brent’s price found some support after the US Energy Information Administration (EIA) reported a drop in US crude stocks.
Commercial crude oil inventories in the US declined by 5.07 million bbls to touch 423 million bbls for the week ending 29 November, according to the EIA data.
A drop in US crude stocks indicates growth in oil demand, which can push Brent's price higher.
Market participants' attention will likely be on the OPEC+ meeting later today. The Saudi Arabia-led group is expected to maintain its current output cut of 2.2 million b/d through the first quarter of next year, according to a Reuters report.
“The market's eyes are locked on OPEC+, the titans of oil supply,” SPI Asset Management’s managing partner Stephen Innes said. “The cartel is widely expected to opt to prolong supply curtailments for another month, but the blueprint for 2025 remains mysterious,” he added.
Downward pressure:
According to oil market analysts, Donald Trump’s victory in the 2024 US election is bearish for oil prices.
“The electoral winds blowing from the US have cast a net bearish shadow over the oil landscape,” Innes said.
US refiners are expected to ramp up production by 1 million b/d at least, Innes remarked, “which should be more than enough to move the Brent needle to $60 [$60/bbl]” in 2025, he added.
In China, state-owned oil refiners are planning to cut crude throughput because of "seasonally weak" domestic fuel demand, according to market intelligence provider JLC.
Sluggish Chinese demand has exerted downward pressure on oil prices, analysts said.
By Aparupa Mazumder
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