Oil futures ended lower Wednesday, but off the session’s worst levels, after reports said the Organization of the Petroleum Exporting Countries and its allies delayed a meeting previously set for Sunday amid a dispute over production levels.
The Energy Information Administration reported weekly gains in U.S. crude and gasoline inventories which contributed to pressure on oil prices ahead of the U.S. Thanksgiving trading holiday Thursday.
Price action
-
West Texas Intermediate crude
CL00,
-0.45% CL.1,
-0.45% CLF24
for January delivery fell 67 cents, or 0.9%, to settle at $77.10 a barrel on the New York Mercantile Exchange, off the session’s low of $73.79. -
January Brent crude
BRN00,
+0.05% BRNF24,
the global benchmark, shed 49 cents, or 0.6%, to $81.96 a barrel on ICE Futures Europe after touching a low at $78.41. -
December gasoline
RBZ23
lost nearly 0.1% to $2.23 a gallon, while December heating oil declined by 1.2% to $2.89 a gallon. -
Natural gas for December delivery
NGZ23
settled at $2.90 per million British thermal units, up 1.8%.
Market drivers
There appears to be “rumble in the jungle” among OPEC members who will participate in the production cuts, “as opposed to enjoy a free ride at the expense of those who have been cutting production,” said Manish Raj, managing director at Velandera Energy Partners. “Saudi Arabia alone has sacrificed its production in the last year, and wants to invite other producers to share its burden.”
Bloomberg, citing delegates, said the OPEC+ meeting delay came as talks stalled due to Saudi Arabia’s dissatisfaction with production levels by other members. Saudi Arabia in July implemented an additional, voluntary cut of 1 million barrels a day, which it has extended through the end of this year. OPEC+ said the meeting will now take place Nov. 30.
Read: OPEC+ meeting postponement raises talk of a ‘rift’ among oil producers
Before the postponement of the gathering, speculation was building around whether OPEC+ will move to deepen production cuts after crude prices retreated around 20% from its 2023 highs set in late September.
Commodities Corner: What’s at stake for oil prices as OPEC+ delays closely watched meeting
“Christmas will come early this year if Saudi Arabia can convince Kazakhstan, Kuwait, Russia, and the UAE to join in additional cuts,” Raj told MarketWatch. “On the other hand, an outright elimination of collective cuts will be a complete disaster for oil markets.”
Given that, “the next eight days are pivotal,” with all eyes and ears on Vienna,” he said.
Supply data were also in focus with the Energy Information Administration and the American Petroleum Institute both having reported hefty weekly gains for U.S. crude inventories.
The EIA said Wednesday that U.S. commercial crude inventories rose by 8.7 million barrels for the week ended Nov. 17. The API late Tuesday said U.S. crude inventories rose by around 9.1 million barrels last week, according to a source citing the data.
On average, analysts polled by S&P Global Commodity Insights expected the EIA to report a crude supply increase of 100,000 barrels.
The EIA report also a revealed an inventory climb of 700,000 barrels for gasoline, while distillate stockpiles declined by 1 million barrels. The forecast called for a gasoline supply increase of 1.1 million barrels and a decline of 400,000 barrels for distillates.
Crude stocks at the Cushing, Okla., Nymex delivery hub rose by 900,000 barrels last week, the EIA said.
The EIA also reported weekly data on natural gas Wednesday, a day earlier than usual because of Thursday’s holiday.
The government agency said U.S. natural-gas supplies in storage edged lower by 7 billion cubic feet for the week ended Nov. 17. On average, analysts surveyed by S&P Global Commodity Insights forecast a weekly increase of 6 billion cubic feet.
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