Oil prices ended near flat on Tuesday after rallying for two sessions, with investors cautious ahead of Sunday’s scheduled OPEC+ meeting, when the producer group may discuss deepening supply cuts due to slowing global economic growth.
Brent crude futures settled 13 cents higher at $82.45 a barrel. U.S. West Texas Intermediate crude futures eased 6 cents lower at $77.77.
Prices pared losses late, with one more session before the U.S. Thanksgiving holiday on Thursday, which typically yields lower trading volumes in oil.
“Going into the long weekend the market would rather be a little bit long than short,” said Andrew Lipow, president of Lipow Oil Associates.
On Monday, both contracts climbed about 2 per cent after three OPEC+ sources told Reuters the group, the Organization of the Petroleum Exporting Countries (OPEC) and allied producers, was set to consider additional oil supply cuts when it meets on Nov. 26.
OPEC+ is likely to extend or even deepen oil supply cuts into next year, eight analysts have predicted.
“We see some scope for the group to do a deeper reduction, but we would anticipate that Saudi Arabia would seek additional barrels from other members to share the burden of the adjustment,” said RBC Capital analyst Helima Croft.
Even if the OPEC+ nations extend their cuts into next year, the global oil market will see a slight supply surplus in 2024, the head of the International Energy Agency’s (IEA) oil markets and industry division said on Tuesday.
Currently though, the oil market is in a deficit with stocks declining “at a fast rate,” Toril Bosoni said on the sidelines of a conference in Oslo.
U.S. crude stocks rose by nearly 9.1 million barrels in the week ended Nov. 17, according to market sources citing American Petroleum Institute figures on Tuesday.
Gasoline inventories dropped by about 1.79 million barrels, while distillate inventories fell by about 3.5 million barrels.
U.S. government data on stockpiles was due on Wednesday.
Oil has fallen about 16 per cent since late September as crude output in the U.S., the world’s top producer, held at record highs, while the market was concerned about demand growth and a potential economic slowdown.
Market participants kept an eye on a development in the Gulf of Mexico, as U.S. officials said seven energy companies have been impacted by an oil discharge near Main Pass Oil Gathering Co’s (MPOG) pipeline system that is estimated to have released more than a million gallons of crude oil.