Oil slips on buildup in US gasoline stocks; eyes on weekend OPEC+ meeting
Shafaq News/ Oil prices drifted lower onThursday after a surprise jump in U.S. gasoline inventories, with investorsfocusing on the OPEC+ meeting this weekend to discuss oil output policy.
Brent crude futures fell by 14 cents, or 0.2%,to $72.69 per barrel by 0401 GMT, while U.S. West Texas Intermediate crudefutures were also down 14 cents, or 0.2%, at $68.58 a barrel.
Trading is expected to be light due to U.S.Thanksgiving holiday kicking off from Thursday.
Oil is likely to hold to its near-term bearishmomentum as the risks of supply disruption fade in the Middle East and stemmingfrom the higher-than-expected U.S. gasoline inventories, said Yeap Jun Rong, amarket strategist at IG.
U.S. gasoline stocks rose 3.3 million barrels inthe week ended on Nov. 22, the U.S. Energy Information Administration (EIA)said on Wednesday, countering expectations for a small draw in fuel stocksahead of record holiday travel.
Slowing fuel demand growth in top consumers theUnited States and China has weighed heavily on oil prices this year, althoughsupply curtailments from OPEC+, which groups the Organization of the PetroleumExporting Countries with Russia and other allies, have limited the losses.
OPEC+ will meet on Sunday. Two sources from theproducer group told Reuters on Tuesday that members have been discussing afurther delay to a planned oil output hike that was due to start in January.
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A further deferment, as expected by many in themarket, has mostly been factored into oil prices already, said Suvro Sarkar,energy sector team lead at DBS Bank.
"The only question is whether it's aone-month pushback, or three-month, or even longer. That would give the oilmarket some direction. On the other hand, we would be worried about a dip inoil prices if the deferments don’t come," he said.
The group, which pumps about half the world'soil, had previously said it would gradually roll back oil production cuts withsmall increases over many months in 2024 and 2025.
Brent and WTI have lost more than 3% each so farthis week, under pressure from Israel's agreement to a ceasefire deal withLebanon's Hezbollah group. The ceasefire started on Wednesday and helped easeconcerns that the conflict could disrupt oil supplies from the top producingMiddle East region.
Market participants are uncertain how long thebreak in the fighting will hold, with the broader geopolitical backdrop for oilremaining murky, analysts at ANZ Bank said.
Oil prices are undervalued due to a marketdeficit, heads of commodities research at Goldman Sachs and Morgan Stanleywarned in recent days, also pointing to a potential risk to Iranian supply fromsanctions that might be implemented under U.S. President-elect Donald Trump.
(Reuters)
