Brent crude falls towards $80 per barrel ahead of the OPEC+ meeting

Oil prices experienced a decline on Monday, with Brent oil futures edging closer to $80 per barrel as investors awaited the OPEC+ group meeting scheduled for this week to determine the extent of production cuts in 2024.

As of 02:31 GMT, Brent crude futures dropped by 37 cents, or 0.5 percent, reaching $80.21 per barrel. Similarly, West Texas Intermediate crude futures fell 36 cents, or 0.5 percent, to $75.18 per barrel.

The previous week saw a slight increase in both Brent and West Texas Intermediate crude prices, marking the first weekly gains in five weeks. This uptick was supported by expectations that major oil-producing nations such as Saudi Arabia and Russia might extend supply cuts until 2024. Additionally, the possibility of further production cuts being discussed by OPEC+ contributed to the positive sentiment.

Geopolitical tensions in the Middle East eased after a truce agreement in Gaza and the exchange of Palestinian hostages and prisoners, contributing to a stabilization of oil prices.

However, market sentiment remains somewhat negative due to the ongoing dispute within OPEC+ over production quotas. The group, including major oil-producing countries like Russia, has postponed its ministerial meeting to November 30 to address differences in production targets for African producers. Despite the challenges, OPEC+ members are reportedly working towards a consensus, as indicated by group sources on Friday. Analysts note that even with Saudi Arabia continuing voluntary production cuts of one million barrels per day until next year, uncertainty in OPEC+ discussions is affecting market sentiment.

The International Energy Agency anticipates a slight increase in global oil supply in 2024, assuming OPEC+ members continue production cuts until the next year. Investors are advised to monitor developments in the OPEC+ discussions for potential impacts on oil prices.