Oil futures rose Thursday as investors awaited the outcome of an online meeting of OPEC+ members that news reports said may produce a round of deeper production cuts for early 2024.
Price action
-
West Texas Intermediate crude for January delivery
CL00,
+0.83%CL.1,
+0.83%CLF24,
+0.83%
rose $1.35, or 1.8% to $79.25 a barrel on the New York Mercantile Exchange. -
January Brent crude
BRNF24,
+0.78%,
the global benchmark, was up $1.33, or 1.6%, at $84.43 a barrel on ICE Futures Europe. February Brent
BRN00,
+0.81%BRNG24,
+0.81%.
the most actively traded contract, gained $1.38, or 1.7%, to trade at $84.26 a barrel.
Market drivers
After several days of wrangling, OPEC+ — made up of the Organization of the Petroleum Exporting Countries and its allies, including Russia —- had a preliminary agreement that would cut production by an additional 1 million barrels a day, or mbd, on top of existing curbs, Reuters reported Thursday morning.
A meeting of OPEC members was under way, news reports said, and will be followed by a meeting of an OPEC+ panel and then OPEC+ ministers, which is where a final decision would be made.
A decision to delay the meeting, which was originally set to take place in person in Vienna on Nov. 26, had previously unsettled the market, stoking fears of a rift between producers that could jeopardize the ability to maintain cuts into 2024. The delay was attributed to objections by OPEC members Nigeria and Angola over proposed production targets.
Oil was lifted Wednesday on news reports that said OPEC+ was making progress toward additional cuts that would include the rollover of voluntary reductions by Saudi Arabia and Russia.
Growing expectations for additional cuts “leaves downside risk for the market if OPEC+ disappoint later today,” Warren Patterson and Ewa Manthey, analysts at ING, said in a note.
“Adding to the uncertainty from the meeting is that it is still not clear if the group has been able to resolve a disagreement over Angolan and Nigerian production targets for next year. However, for now, the market appears focused on the potential for deeper cuts,” they wrote.
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