Oil consolidates its gains and OPEC+ is considering reducing production further

Oil futures rose on Monday, continuing their gains based on expectations that the OPEC+ group will reduce supplies further to support prices that have been declining for four weeks due to waning fears of disruption to Middle East supplies due to the war between Israel and the Palestinian Hamas movement.

By 0012 GMT, Brent crude futures rose 11 cents, or 0.1 percent, to $80.72 per barrel, while US West Texas Intermediate crude rose eight cents to record $75.97 per barrel. The front-month December contract expires later on Monday, while the more active January futures contract rose 13 cents, or 0.2 percent, to $76.17 a barrel.

The two contracts rose four percent at settlement on Friday after three OPEC+ sources told Reuters that the producer group, made up of the Organization of the Petroleum Exporting Countries and its allies, including Russia, is preparing to discuss whether to make additional cuts in oil supplies when it meets on November 26. the second.

“Our statistical model of OPEC decisions suggests that deeper cuts should not be ruled out given lower speculative positions, time spreads and higher-than-expected inventories,” Goldman Sachs analysts said in a note.

The bank’s basic expectations are that the current group’s production cuts will remain in full effect in 2024, and that the unilateral reduction of one million barrels per day pursued by Saudi Arabia will be extended until the second quarter of next year, and will only be reversed gradually starting in July.

Tony Sycamore, an analyst at IG Markets, said that West Texas Intermediate crude oil prices may rise towards $80 per barrel on the back of the possibility of OPEC+ announcing deeper cuts at their next meeting, although a drop below $72 will encourage the US administration to refill oil reserves. American strategist.

He added, “All of this indicates the possibility of a price recovery in the first half of this week.”

Investors are also anticipating a disruption in Russian crude oil trade after Washington imposed sanctions on three ships that sent Sokol crude to India.

On Friday, Moscow lifted a ban on gasoline exports, which could increase global supplies of motor fuel. This comes after Russia lifted most restrictions on diesel exports last month.