Brent rises ahead of the OPEC+ decision on oil production

24 Nov 2023 , 09:26 AM

Early Asian trading on Friday saw a rise in Brent oil futures, recovering losses from the previous session as traders bet on the possibility that OPEC+ will reach a consensus on additional production cuts. Brent crude futures increased by 29 cents, or 0.4%, to $81.71 after falling by 0.7% during the previous trading session.

From its closing on Wednesday, U.S. West Texas Intermediate crude fell 38 cents, or 0.5%, to $76.72. Thursday was a public holiday in the United States, so there was no WTI settlement.

With anticipation that OPEC+, led by Saudi Arabia, may cut production to balance the markets through 2024, both futures are expected to see their first weekly increase in five.

After producers failed to reach an agreement on production levels, the Organization of Petroleum Exporting Countries and its allies, or OPEC+, shocked the market on Wednesday by announcing that it will move up a ministerial meeting to November 30.

In Wednesday’s intraday trade, the unexpected postponement had initially caused Brent futures to drop by as much as 4% and WTI by as much as 5%.

Due to the American Thanksgiving break, trading remained muted.

On the demand side, researchers noted that lower crude demand from American refineries has resulted from low refining margins.

The Brazilian state energy company Petrobras plans to invest $102 billion over the next five years to expand output to 3.2 million barrels of oil equivalent per day (boepd) by 2028 from 2.8 million boepd in 2024, indicating that non-OPEC production growth is expected to continue robust.

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