Oil retreats amid skepticism over OPEC+ potential output cuts

Oil prices fell on Monday due to traders’ wait-and-see attitude towards OPEC and its allies’ plans to cut production in the first quarter of 2024.

Fears of a drop in demand also put pressure on prices. Brent crude futures settled down 85 cents or 1.08% at $78.03 a barrel, while US West Texas Intermediate crude futures finished down $1.03, or 1.39%, at $73.04. The OPEC+ meeting last week announced voluntary production cuts, raising doubts about whether producers would fully implement them and how the cuts would be measured.

Traders have waited over the past five months to see if production cuts and predicted changes in demand would come to fruition. The OPEC+ deal last week was unconvincing, and markets seemed anticipating more of an economic slowdown next year.

Surveys showed global manufacturing activity remained weak in November on soft demand, with euro zone factory activity contracting. Western countries have stepped up efforts to enforce the $60 a barrel price cap on seaborne shipments of Russian oil imposed to punish Moscow for the war in Ukraine.