- Crude oil futures are higher this week after three weeks of losses
- OPEC+ sees course for rollover of oil policy, cuts not ruled out
- Oil prices could fall without more OPEC+ cuts, analysts say
- Poland agrees to EU deal for price cap of $60 per barrel
- Russian oil production could fall by 500,000 to 1 million barrels a day
HOUSTON, Dec 2 (Portal) – Oil futures slipped 1.5% on Friday ahead of a meeting of the Organization of Petroleum Exporting Countries and its Allies (OPEC+) on Sunday and an EU ban on Russian crude on Monday.
Brent crude futures fell $1.31, down 1.5%, to $85.57 a barrel. U.S. West Texas Intermediate (WTI) crude oil futures fell $1.24, or 1.5%, to $79.98 a barrel.
Both contracts dipped in and out of negative territory but posted their first weekly gains at around 2.5% and 5%, respectively, after three consecutive weeks of declines.
“Traders will be reluctant to go short over the weekend as rumors mount that OPEC may be trying to shock and impress the market at its weekend meeting,” said Phil Flynn, analyst at Price Futures Group.
OPEC+ is widely expected to stick to its latest target of cutting oil production by 2 million barrels per day (bpd) at Sunday’s meeting, but some analysts believe crude prices could fall if the group makes no further cuts makes.
“Crude oil carries significantly higher weekend risk and could be extremely volatile at the open next week,” said Craig Erlam, an analyst at Oanda, a view shared by other analysts.
Russian oil production could fall by 500,000 to 1 million bpd in early 2023 due to the European Union’s ban on seaborne imports from Monday, two sources of major Russian producers said.
Poland agreed to the EU’s deal on a $60-a-barrel price cap for Russian sea oil, which allowed the bloc to formally approve the deal over the weekend, Poland’s ambassador to the EU Andrzej Sados said.
European Commission President Ursula von der Leyen said Russia’s oil price cap will be adjusted over time to allow the Union to respond to market developments.
Russian Ural crude was trading at around $70 a barrel Thursday afternoon. The cap was designed to limit revenue going to Russia without leading to an increase in the price of oil.
China is sending optimistic signals and will announce an easing of its COVID-19 quarantine protocols within days, sources told Portal, which would mean a major change in policy for the world’s second-largest oil consumer, though analysts warn a significant economic reopening is likely months away.
The US oil rig count, an indicator of future production, was flat this week, according to data from Baker Hughes. Concerns that US shale might not be able to boost production in the short term also accelerated. Continue reading[[[[
Government data also showed that US employers added more jobs than expected in November, while average hourly wages also rose, potentially giving the Federal Reserve more incentive to hike interest rates. Continue reading
Money managers reduced their net long positions in US crude oil futures and options in the week ended November 29, the US Commodity Futures Trading Commission (CFTC) said.
Reporting by Arathy Somasekhar in Houston Additional reporting by Mohi Narayan in New Delhi Editing by Marguerita Choy and Matthew Lewis
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