Oil prices saw a continual decline, marking the fourth consecutive day of decrease, primarily attributed to the anticipation surrounding the postponed OPEC+ meeting and a cautious stance in global financial markets.
Brent, the global benchmark for oil, slipped below the $80 per barrel mark, registering a decline for the past five weeks, marking its lengthiest downward streak since the end of 2021. This downtrend mirrored the decrease in equities, as Chinese industrial companies reported slower profit growth in October, signaling potential risks to the expansion of the world’s largest importer of crude.
The critical OPEC+ meeting, crucial in determining supply policies, faced a four-day postponement to November 30 due to a dispute over quotas among member nations. Anticipating weakness in crude futures, traders and analysts expect additional measures from the group to tighten the market.
The Brent crude has witnessed a nearly 20% drop from its late September peak, primarily due to increased supply from non-OPEC+ countries and the diminishing impact of the Israel-Hamas conflict, which had earlier bolstered oil prices. Recent forecasts from the International Energy Agency suggest a potential return to surplus in the market next year.
Analysts at ING, Warren Patterson, and Ewa Manthey, expressed ongoing pessimism in the oil market. They anticipate the Saudis to maintain current production cuts, and there’s a growing likelihood of a broader cut by the group. Such actions could offer crucial market support as the world heads into 2024.
The prevailing sentiment suggests a negative outlook, influenced by the uncertainty surrounding the OPEC+ meeting and the potential need for more significant measures to stabilize the market, particularly amid increased supply from various sources and geopolitical shifts affecting price dynamics.