Oil prices fell in the previous session after the release of some hostages in Gaza reduced the geopolitical risk premium, but prices posted their first week of gains in more than a month ahead of next week’s production policy decision by the Organization of the Petroleum Exporting Countries and its allies. (OPEC+)
Brent crude futures settled down 84 cents, or 1 percent, at $80.58 a barrel, while U.S. West Texas Intermediate crude fell $1.56, or 2 percent, from Wednesday’s close to $75.54, according to Reuters news agency. .
Read also: India’s crude oil production up 1.3% to 2.5 MMT in October, imports rise after four months of declines: PPAC
Both contracts had their first weekly gain in five weeks as OPEC+ prepares for its meeting, which will have output cuts high on the agenda after recent oil price declines on demand concerns and higher supply, particularly from non-OPEC producers.
At home, on the Multi Commodity Exchange (MCX), oil futures ahead of December 18 expiration settled lower by 0.56 percent at ₹6,338 per bbl, having swung between ₹6,330 and ₹6,436 per bbl during the session, against a previous close of ₹6,374 per barrel.
What affects oil prices?
-The first group of hostages freed from captivity in Gaza returned to Israel on Friday, on the first day of a planned four-day break, during which more hostage exchanges for Palestinian detainees will take place.
-The OPEC+ group surprised the market on Wednesday by postponing its November 26 to November 30 after the oil producers struggled to reach a consensus on output levels.
-Analysts speculate that Saudi Arabia is pushing to extend the supply cuts beyond 2023. The surprise delay initially sent Brent futures down as much as 4 percent and WTI as much as 5 percent in intraday trading on Wednesday.
-China’s long-term economic outlook remains weak. Analysts say oil demand growth could weaken to around 4 percent in the first half of 2024 as the property sector crisis weighs on diesel use. According to analysts, fresh help to China’s debt-ridden property sector can be positive for the near-term trend of the oil market.
-Non-OPEC production growth is set to remain strong, with Brazilian state energy company Petrobras planning to invest $102 billion over the next five years to boost output to 3.2 million barrels of oil equivalent per day (boepd) by 2028, up from 2.8 millions boepd in 2024, according to Reuters.
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Updated: 25 Nov 2023, 21:59 IST