By Adedapo Adesanya
Oil prices ended mixed on Tuesday after rallying for two sessions, with investors cautious ahead of Sunday’s scheduled meeting of the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) when the group may discuss deepening supply cuts due to slowing global economic growth.
During the trading day, Brent improved its price by 13 cents to close at $82.45 a barrel, while the US West Texas Intermediate (WTI) moderated by 6 cents to settle at $77.77 per barrel.
On Monday, both contracts climbed about 2 per cent after it was reported that the allied producers, was set to consider additional oil supply cuts when it meets on November 26.
OPEC+ is likely to extend or even deepen oil supply cuts into next year.
The group already has a plan to curb supplies by 3.66 million barrels per day into 2024 made during its last meeting in June.
OPEC’s top producer, Saudi Arabia, has repeatedly stressed during previous meetings it wants to see strong compliance with cuts so all members share the burden of producing less.
At its last policy meeting in June, OPEC+ agreed on a broad deal to limit supply into 2024 and Saudi Arabia pledged a voluntary production cut for July of 1 million bpd that it has since extended to last until the end of 2023.
However, there was a cautious warning from the International Energy Agency(IEA) that 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 Paris-based agency’s oil markets and industry division, Ms Toril Bosoni said on the sidelines of a conference in Oslo on Tuesday.
“Global oil stocks are at low levels, which means that you risk increased volatility if there are surprises on either the demand side or the supply side,” she added.
US crude stocks rose by nearly 9.1 million barrels in the week ended November 17, according to market sources citing American Petroleum Institute (API) figures on Tuesday.
The official data from the US Energy Information Administration (EIA) will be published later on Wednesday.
A development in the Gulf of Mexico may impact the market as US officials said seven energy companies have been impacted by an oil discharge near Main Pass Oil Gathering Co’s (MPOG) pipeline system. It is estimated to have released more than a million gallons of crude oil.
The market will be looking ahead of the US Thanksgiving holiday on Thursday, which typically yields lower trading volumes in oil.
Modupe Gbadeyanka