© Reuters.
Investing.com– Oil prices fell in Asian trade on Thursday tracking weak economic signals from top importer China, with traders now holding out for an upcoming OPEC+ meeting where the cartel is widely expected to announce more supply reductions.
Crude prices were also headed for a second straight month of losses in November, hit by fears of worsening oil demand as economic conditions deteriorated across the globe. Slackening growth in China- the world’s top oil importer- remained a key point of contention for crude.
But oil still saw some measure of recovery this week after five straight weeks of losses. Support came from supply disruptions in Russia and Kazakhstan, a weaker , and the prospect of production cuts by the Organization of Petroleum Exporting Countries and allies (OPEC+).
expiring January fell 0.4% to $82.81 a barrel, while fell 0.4% to $77.54 a barrel by 20:34 ET (01:34 GMT). Both contracts were set to lose between 3% and 5% in November.
China PMIs miss expectations, spur demand concerns
Purchasing managers index (PMI) figures from China showed that contracted further in November, while growth in slumped to its weakest levels for the year.
The readings showed that recent monetary stimulus measures from Beijing had done little to shore up business activity, especially as local manufacturers saw an extended decline in overseas demand for goods and services.
Signs of a continued economic decline in the country spurred concerns over just how resilient Chinese oil demand will remain in the coming months. The country built up a large level of stockpiles this year, which could reduce its appetite for crude imports going into 2024.
OPEC+ cuts in focus, reports suggest 1 mln bpd reduction
Oil traders were now seeking some price relief from an later on Thursday, with Reuters reports suggesting that the cartel was considering much deeper production cuts to offset a recent slump in crude prices.
Saudi Arabia and Russia are expected to lead the cartel in further trimming production, given that the two countries reduced supplies by a combined 5 million barrels of oil per day over the past year. Media reports on Wednesday suggested that the cartel will cut production by an additional 1 million barrels per day (bpd).
Still, doubts persisted over the full scope of the planned supply cuts, especially after reported disagreements between OPEC+ members saw a delay in November’s meeting, which was initially scheduled for Nov. 26.
The OPEC+ has consistently reduced supply this year to stem weakness in oil prices. But the cuts have so far provided only fleeting support to prices, with Brent and WTI futures trading down between 3.5% and 4% for 2023.
A sustained rise in U.S. oil inventories also indicated that markets were not as tight as oil bulls were hoping. U.S. saw an unexpected, 1.6 million barrel build in the week to Nov. 24, with outsized builds in and inventories, official data showed on Wednesday.
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