Oil Set for 4th Weekly Gain Ahead of OPEC+ Meeting
(Bloomberg) -- Oil is heading for a fourth weekly gain, the longest winning streak since April, before a key OPEC+ meeting next week that will set the path for future production cuts.
Futures were steady near $58 a barrel in New York as the U.S. Thanksgiving holiday reduced trading volumes. Saudi Arabia is likely to signal at the Vienna gathering that it’s no longer willing to compensate for the non-compliance of other members, according to people familiar with the kingdom’s thinking. OPEC and its allies are expected to extend the current supply pact, rather than deepen reductions, according to a Bloomberg survey.
Oil is set for a second monthly gain on optimism Beijing and Washington are close to an initial trade deal, even after the U.S. passed legislation expressing support for Hong Kong protesters, prompting a rebuke from China. An OPEC advisory committee, which analyzes the market before ministerial meetings and sometimes makes policy recommendations, didn’t discuss deeper cuts, according to delegates that asked not to be named.
“The trade deal and its positive impact on global growth remain at the fore, but there’s still a number of issues impacting oil prices,” said Stephen Innes, a market strategist at AxiTrader. “At least some clarity is starting to emerge surrounding the OPEC meeting where all parties concerned will attempt to enforce stricter compliance with the existing agreement.”
West Texas Intermediate for January delivery lost 12 cents, or 0.2%, to $57.99 a barrel on the New York Mercantile Exchange as of 2:18 p.m. in Singapore. There was no settlement Thursday due to the U.S. holiday and all transactions will be booked Friday. Prices are up 0.4% this week and are around 7% higher in November.
Brent for January settlement dropped 0.4% to $63.61 a barrel on the London-based ICE Futures Europe Exchange, declining for a third day. The contract is up 0.3% this week, also heading for a fourth weekly advance. The global benchmark crude traded at a $5.62 premium to WTI.
Saudi Arabia has largely turned a blind eye over the past year to cheaters within the OPEC+ alliance, cutting its own output more than agreed to offset over-production from the likes of Iraq and Russia. Ministers from the Organization of Petroleum Exporting Countries and its partners will meet in Vienna from Dec. 5 to 6 to decide on policy going forward.
China’s foreign ministry warned of retaliation on Thursday after President Donald Trump signed bills backing Hong Kong’s protesters, without providing details. While slowing the trade talks is the most obvious way China could retaliate, Beijing has tolerated a lot to keep them on track.
Other market drivers
--With assistance from James Thornhill.
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