Oil continues to rise as OPEC+ considers further cutbacks

20 Nov 2023 , 10:05 AM

In an effort to support prices, which have dropped for the past four weeks due to dwindling worries over Mid-East supply interruption spurred on by the Israel-Hamas conflict, oil futures edged higher on Monday.

Brent crude futures had increased by 11 cents, or 0.1%, to $80.72 per barrel, while US West Texas Intermediate crude had gained 8 cents to $75.97 per barrel. The more actively traded January futures climbed 13 cents, or 0.2%, to $76.17 a barrel, while the front-month December contract expires later on Monday.

After three OPEC+ sources informed Reuters that the producer group, which consists of Russia and the Organisation of the Petroleum Exporting Countries, is expected to discuss whether to implement further cuts in oil supply during its meeting on November 26, both contracts settled 4% higher on Friday.

Since late September, oil prices have decreased by about 20%, and last week, the immediate inter-month spreads for Brent and WTI fell into contango. In a contango market, prompt prices are lower than those in subsequent months, indicating an adequate supply.

Following Washington’s sanctions against three ships that were transporting Sokol crude to India, investors are also watching for potential disruptions in the Russian crude oil market.

Moscow removed a prohibition on petrol exports on Friday, potentially increasing the amount of the motor fuel available worldwide. This comes after Russia removed the majority of its export prohibitions on fuel last month.

In the Middle East, despite intense fighting, US and Israeli officials suggested that an agreement to release some of the captives held in the beleaguered Gaza enclave was getting near.

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