Oil prices rise after bruising losses amid talks of more OPEC+ measures

December 07, 2023 01:02 PM AEDT | By Investing
Follow us on Google News:

Investing.com-- Oil prices rose in Asian trade on Thursday after tumbling to over five-month lows, as a meeting between Russian and Saudi leaders saw the two discussing more “cooperation” on oil prices.

Russian President Vladimir Putin met with Saudi Crown Prince Mohammed bin Salman this week, with the two reportedly discussing further co-ordination between members of the Organization of Petroleum Exporting Countries and allies (OPEC+).

Putin is also set to meet United Arab Emirates and Iranian leaders this week.

The meetings come just a few days after the OPEC’s new production cuts for 2024 largely underwhelmed markets, sending oil prices into a tailspin. Saudi Arabia and Russia have led the cartel in cutting supply through 2023 to support crude prices.

But the latest OPEC+ meeting showed other member states as less enthusiastic about decreasing production, given that the cuts also eat into national revenue streams. This saw the OPEC+ declare less than 1 million barrels per day of new cuts in 2024, with most of the new cuts also coming as voluntary.

Oil prices had plummeted after the meeting, sinking to their weakest levels since early-July this week. Prices were also pressured by growing concerns over weakening crude demand in the coming months, as global economic conditions deteriorated.

Brent oil futures expiring February rose 0.5% to $74.63 a barrel, while West Texas Intermediate crude futures rose 0.5% to $69.99 a barrel by 20:45 ET (01:45 GMT).

But while the OPEC+ cuts underwhelmed, they are still expected to tighten crude markets marginally in the first quarter of 2024. Analysts expect Brent to trade in the low $80s in early-2024.

Demand concerns remain in play

A string of weak economic readings from Asia, the U.S. and the euro zone pushed up concerns over sluggish crude demand in the coming months.

An underwhelming ADP nonfarm employment report showed that the U.S. labor market was cooling steadily, while an outsized jump in gasoline inventories showed that fuel demand was rapidly declining in the world’s largest fuel consumer.

U.S. Gasoline futures slumped to a near two-year low after the inventory report, which also showed a bigger-than-expected draw in overall crude inventories over the week to Dec. 1.

But U.S. oil production remained largely upbeat, while crude inventories were sitting on six straight weeks of oversized builds.

Markets were now awaiting key oil import data from China, due later in the day. Broader focus was also on U.S. nonfarm payrolls data due this Friday.

This article first appeared in Investing.com


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.



Top ASX Listed Companies

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK