During trading today, Monday, November 20 (2023), oil prices rose around 1%, reaping continued gains for the second consecutive session amid fears of supply cuts.
It comes amid expectations of deepening supply cuts by OPEC+ to support prices, which fell 4 weeks ago on fears of disruption to Middle East supplies in light of the Gaza war.
On Friday, November 17, oil prices ended their trade with an increase of more than 4%, but recorded losses for the fourth week in a row.
Oil price today
By 06:51 AM GMT (09:51 AM Mecca Time), benchmark Brent crude futures for January 2024 delivery were up 0.89% at $81.33 a barrel.
At the same time, US West Texas Intermediate crude futures for delivery in December 2023 rose 0.92% to $76.59 a barrel, according to figures tracked by a specialist energy site.
Oil prices have fallen about 20% since late September, while spot prices are lower than they will be in the coming months, indicating ample supply.
Oil price analysis
The OPEC+ alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and external allies including Russia, is considering whether to make further oil supply cuts when it meets on November 26.
Goldman Sachs analysts said: “Our statistical modeling of the OPEC results suggests that deep cuts should not be ruled out given the low speculative levels, timing spreads and higher-than-expected inventories.”
The bank’s baseline expectations are that the group’s current production cuts will remain in full force in 2024, and that Saudi Arabia’s unilateral 1 million barrel cut will extend into the second quarter of next year, and be replaced only gradually. From next July.
IG analyst Tony Sycamore said WTI prices could rise to $80 a barrel on the back of OPEC+ likely to announce deeper cuts at their next meeting, although a drop below $72 would encourage the Biden administration to replenish strategic oil reserves.
He added: “All expectations point to a possible recovery in oil prices in the first half of this week,” he said. Reuters.
Oil supply
Investors are also expecting a disruption in Russian crude oil trade after Washington imposed sanctions on three vessels that shipped Sokol crude to India.
On Friday, Moscow lifted a ban on gasoline exports; That could boost global supplies of auto fuel and comes after Russia lifted most of its restrictions on diesel exports last month.
In the Middle East, US and Israeli officials said they were close to reaching an agreement to free some hostages in the besieged Gaza Strip, despite continued Israeli attacks targeting civilians.
Baker Hughes Energy Services said Friday: U.S. energy companies added oil and gas rigs last week for the first time in 3 weeks. The number of oil and gas rigs is an early indicator of future production.
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