Oil prices were little changed on Tuesday, trading within a narrow range, as traders awaited the outcome of an OPEC+ meeting later this week.
Brent crude futures were up 14 cents, or 0.19%, at $71.97 a barrel by 0404 GMT, after a 1-cent drop in the previous session. U.S. West Texas Intermediate crude climbed 8 cents, or 0.12%, to $68.18, following a 10-cent gain at Monday’s close.
“Investors are in wait-and-watch mode ahead of the OPEC+ meeting,” ANZ analysts said in a note.
Sources from the producer group said it will extend its latest round of output cuts until the end of the first quarter at its Dec. 5 meeting.
OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, has been looking to unwind production cuts by the first quarter of 2025. However, the outlook for surplus supply has put pressure on prices. The group accounts for about half of the world’s oil production.
“I think there’s no other option but to defer it,” Priyanka Sachdeva, a senior market analyst at Phillip Nova said, adding that it may be for just a month or so as there is a lot of pressure from participating nations to ramp up output.
Amid a lack of bullish catalysts and lacklustre demand, Sachdeva expects oil prices to trade in a limited range with a bias towards the downside.
Consumption outlook remains weak with China’s oil demand expected to peak as soon as next year, researchers and analysts said, further exacerbating the gap between demand and supply.
Saudi Arabia, the world’s top exporter, is expected to cut crude prices for Asian buyers to the lowest level in at least four years, traders said.
Concerns that the U.S. Federal Reserve may not cut rates at its December meeting have also capped oil prices, offsetting positive signals from China, where the purchasing managers’ index rose to a seven-month high in November.
Oil prices on both sides of the Atlantic fell more than 3% last week.
Federal Reserve Governor Christopher Waller, whose views are often a bellwether for U.S. monetary policy, said he was inclined to support another rate cut this month, but Atlanta Federal Reserve President Raphael Bostic maintained that the Fed still needed to consider upcoming jobs data.
In the Middle East, holes continued to appear in a U.S.-brokered ceasefire between Israel and militant group Hezbollah, with nine people killed in strikes on two southern Lebanese towns shortly after Hezbollah fired missiles on an Israeli military position in the disputed Shebaa Farms area on Monday.
(Reporting by Florence Tan in Singapore and Colleen Howe in Beijing; Editing by Himani Sarkar and Sherry Jacob-Phillips)