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Oil Holds Two-Day Advance on Speculation OPEC+ May Deepen Curbs - BLOOMBERG

NOVEMBER 21, 2023

(Bloomberg) -- Oil pared a two-day advance that was driven by speculation OPEC+ may choose to deepen supply cuts at a meeting this weekend.

Global benchmark Brent eased below $82 a barrel after rising more than 6% over the prior two sessions. US oil options point to many traders betting that the producer group is poised to add to output curbs in a bid to reverse a recent slide in prices.

Between now and the weekend meeting, traders will get fresh insights into US fundamentals with the release of official figures on crude and product stockpiles. Nationwide crude inventories have expanded for the past four weeks to the highest since August. There’s also a US holiday that is likely to curtail trading activity in the second half of the week. 

Indications that non-OPEC crude supplies are expanding have buffeted prices in recent weeks, with the gains in production offsetting the impact of collective and voluntary reductions agreed by the Organization of Petroleum Exporting Countries and its allies including Russia.

“We see some scope for the group to do a deeper reduction,” RBC Capital Markets LLC analysts including Helima Croft said in a note on Monday, referring to OPEC+. Although the group is broadly expected to maintain the existing supply reductions, “it is hard to make binding calls on policy action given the leadership’s fondness for unpredictable outcomes.”

In the Middle East, Hamas — designated a terrorist organization by the US and European Union — said it was close to reaching a “truce agreement” in talks with Qatar and Israel, in a sign that suggests discussions over freeing some hostages held by the militant group are progressing. Even with those discussions ongoing, the fighting in Gaza rages on.


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