Oil steady ahead of OPEC+ meet

by Jonathan Adams

Brent crude futures dropped 15 cents, or 0.2 per cent, to $82.95 a barrel, while U.S. WTI crude futures increased 12 cents, or 0.2 per cent, at $77.98 a barrel

Oil was little changed on Thursday as investors remained cautious ahead of anticipated production cuts by the OPEC+ group and as weaker Chinese factory data underscored slowing growth in the country.

Brent crude futures dropped 15 cents, or 0.2 per cent, to $82.95 a barrel by 0445 GMT, while U.S. West Texas Intermediate (WTI) crude futures increased 12 cents, or 0.2 per cent, at $77.98 a barrel.

Oil markets in the previous session found support from expectations of some form of a price-supportive resolution from OPEC+, which includes the Organization of Petroleum Exporting Countries and allies including Russia.

Members of OPEC+ are due to hold a policy meeting on Thursday. Talks ahead of the meeting were focusing on further production cuts, although details were yet to be agreed, sources close to the group told Reuters.

The countdown to the upcoming OPEC+ meeting is now underway, and that has been the central focus for oil prices, as market participants have been shrugging off any bearish news in the way for now, said Yeap Jun Rong, market strategist at IG.

We have a larger-than-expected build-up in crude inventories from the Energy Information Administration (EIA) data, along with a downside surprise in China’s Purchasing Managers’ Index (PMI) data this morning. Both may support a narrower supply-demand deficit, but failed to cause much dent in prices, Rong said.

China’s manufacturing activity contracted for a second successive month in November and at a faster pace than expected, according to an official factory survey on Thursday, indicating more policy support measures are required to help boost economic growth in the world’s biggest oil importer.

The official PMI dropped to 49.4 in November from 49.5 in October, staying below the 50-point level demarcating contraction from expansion.

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