Oil retreats on caution ahead of OPEC meeting

Oil retreats on caution ahead of OPEC meeting

Reuters: LONDON — Oil prices went down on Tuesday, reversing big gains made in the previous two sessions. Investors became more careful before a meeting of OPEC+ this Sunday, where the producer group may talk about extending supply cuts because of slowing global growth.

Three OPEC+ sources told Reuters that the group, which is made up of OPEC and its friends, was going to decide whether to cut oil supplies even more when it meets on November 26. This caused both contracts to rise by about 2% for Monday.

At 10:17 GMT, Brent oil futures fell 80 cents, or 1%, to $81.52 a barrel. West Texas Intermediate crude futures in the US also fell 80 cents, or 1%, to $77.03.

“No doubt that the upcoming meeting of OPEC+ energy ministers will be one of the most pivotal of recent times as investors are searching for clues whether the hints and rumours will be backed up by action,” stated Tamas Varga of oil broker PVM.

Kelvin Wong, an analyst at OANDA in Singapore, said that short-term traders made money on WTI after several technical signs showed that the price had been bought too much.

Eight experts say that OPEC+ is likely to keep or even tighten oil supply cuts going into next year.

RBC Capital analyst Helima Croft stated: “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.”

Since late September, the price of oil has dropped about 16%. This is because world crude production stayed at record highs, and the market was worried about rising demand and a slowing economy.




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