Brent crude oil futures recorded gains in early Asian trading, today, an increase of 0.4 percent, reaching 81.71 dollars. It compensated for losses incurred in the previous session, as it fell by 0.7 percent upon settlement. On the other hand, traders are trying to predict whether the OPEC+ alliance will reach an agreement that leads to further production cuts.
Crude oils head for their first weekly rise
Compared to Wednesday’s session, US West Texas Intermediate crude fell 38 cents, or 0.5 percent, reaching $76.72 without settlement. That was due to the official holiday in the United States.
Both crude oil prices are heading to achieve their first weekly rise in five weeks. They are supported by expectations that OPEC+ may reduce supply to balance markets until 2024. OPEC and its allies surprised the market by announcing postponing a ministerial meeting for four days until November 30.
Extension of reductions
In this context, Tony Sycamore, IG Australia market analyst, suggested in a note “an extension of the current cuts.”
The sudden postponement initially led to a decline in Brent crude futures by as much as four percent. Whereas, US crude fell by as much as 5 percent in trading on Wednesday. Notably, trading remained weak due to the Thanksgiving holiday in the United States.
Read: Oil prices record lowest levels in 4 months
Decreased demand for oil in China
Some analysts believed that weak refining margins led to a decline in demand for crude oil from American refineries.
Moreover, analysts expect oil demand growth in China to decline to four percent in the first half of 2024. That is compared to strong growth levels after the Covid-19 pandemic in 2023. Furthermore, the real estate sector crisis in the country is affecting diesel demand.
Non-OPEC production growth is expected to remain strong. Brazilian state energy company Petrobras intends to invest $102 billion over the next five years to increase production. Its aim is to reach a goal of 3.2 million barrels per day by 2028. That is compared to 2.8 million barrels per day in 2024.
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