Oil little changed in thin trading ahead of key OPEC+ meeting

Brent for January settlement slipped 0.2% to $72.69 a barrel at 12:32 p.m. in Singapore.

Oil was little changed as trading thinned before the US Thanksgiving holiday, with the focus on this weekend’s OPEC+ meeting.

Global benchmark Brent was near $73 a barrel after ending just 2 cents higher on Wednesday, with West Texas Intermediate below $69. OPEC+ is widely expected to once again delay restoring production when it meets on Sunday, to offset concerns about an anticipated glut next year.

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Oil has been caught in a tight range since mid-October, with prices buffeted by geopolitical risks in the Middle East and Ukraine, Donald Trump’s presidential election victory and expectations of a glut in 2025. US trading has quietened before the holiday, with just over 500,000 lots of WTI changing hands on Wednesday — almost 40% less than the year-to-date average.

“Crude may have already baked in a small deferral in OPEC+ tapering” its production cuts, said Vandana Hari, founder of Vanda Insights in Singapore. “A decision to proceed with the boost from January 1 or something as drastic as an indefinite postponement” would be a surprise for markets, she added.

Meanwhile, US crude inventories fell by 1.8 million barrels last week, snapping a three-week run of gains, according to Energy Information Administration data.

Widely watched timespreads have also strengthened. The gap between Brent’s two nearest contracts was 53 cents a barrel in a bullish backwardation pattern, when the prompt contract trades at a premium over the following one. The difference was 29 cents at the beginning of last week.

© 2024 Bloomberg

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