Opec meets this weekend, and talks have begun to delay the oil production restart planned for January for several months on signs of a glut, according to delegates. — Bloomberg
NEW YORK: Oil steadied as signs that the Organisation of the Petroleum Exporting Countries and its allies (Opec+) will once again delay restoring some output countered easing geopolitical risk after a ceasefire agreement between Israel and Hezbollah.
Brent crude was below US$73 a barrel after losing about 3% in the prior two sessions on anticipation of a truce, while West Texas Intermediate held above US$68.
Opec+ meets this weekend, and talks have begun to delay the oil production restart planned for January for several months on signs of a glut, according to delegates.
Israel reached a deal for a 60-day ceasefire with the Lebanese militant group Hezbollah after weeks of talks mediated by the United States.
However, shortly after President Joe Biden announced the accord, both sides pressed ahead with attacks, highlighting the difficulties in securing a long-term agreement.
Crude has been caught in a tight range since the beginning of last month, buffeted by competing bullish and bearish signals.
There’s a number of catalysts that may drive the market’s next move, including the policies of a second Trump presidency and geopolitical risks linked to Russian and Iranian supplies next year.
“We’re pretty fairly priced” with Brent between US$70 and US$75 a barrel, said Robert Rennie, head of commodity and carbon research at Westpac Banking Corp.
“It’s pretty much a done deal that Opec+ will agree to roll over the current production cuts through the first quarter.”
The American Petroleum Institute reported US crude inventories shrank by 5.9 million barrels last week, which would be the biggest drop since August if confirmed by government figures.
Elsewhere, a Canadian petroleum industry group said that President-elect Donald Trump’s proposed tariffs would result in higher petrol and energy costs for US consumers. — Bloomberg
