Oil steadies ahead of OPEC+ meeting, EU Russian oil ban By Reuters
Commodities 11 minutes ago (Dec 02, 2022 12:07PM ET)
(C) Reuters. FILE PHOTO: A view shows the crude oil terminal Kozmino on the shore of Nakhodka Bay near the port city of Nakhodka, Russia August 12, 2022. REUTERS/Tatiana Meel/File Photo
By Arathy Somasekhar
HOUSTON (Reuters) -Oil futures were little changed in choppy trading on Friday ahead of a meeting of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) on Sunday and an EU ban on Russian crude on Monday.
Brent crude futures were down 15 cents, or 0.2%, at $86.75 per barrel by 11:33 a.m. (1633 GMT). U.S. West Texas Intermediate (WTI) crude futures rose 11 cents, or 0.1%, to $81.35 per barrel.
Both contracts dipped in and out of negative territory, but, but were on track for their first weekly gains, the biggest in two months at around 4% and 7% respectively, after three consecutive weeks of drops.
“Traders will be hesitant to be short over the weekend if there are growing rumblings that OPEC might try to shock and awe the market at their weekend meeting,” said Phil Flynn, an analyst at Price Futures group.
OPEC+ is widely expected to stick to its latest target of reducing oil production by 2 million barrels per day (bpd) when it meets on Sunday, but some analysts believe that crude prices could fall if the group does not make further cuts.
“Crude carries significantly more weekend risk and could be extremely volatile on the open next week,” said Oanda analyst Craig Erlam, a view echoed by other analysts.
Russian oil output could fall by 500,000 to 1 million bpd early in 2023 due to the European Union ban on seaborne imports from Monday, two sources at major Russian producers said.
EU governments tentatively agreed on a $60 a barrel price cap on Russian seaborne oil with an adjustment mechanism to keep the cap at 5% below the market price, according to diplomats and a document seen by Reuters.
The cap, which was designed to limit revenues to Russia while not resulting in an oil price spike, still needs formal approval before the bloc’s sanctions on Russian crude kick in on Dec. 5.
Russian Urals crude traded at around $70 a barrel on Thursday afternoon.
Sending bullish signals, China is set to announce an easing of its COVID-19 quarantine protocols within days, sources told Reuters, which would be a major shift in policy in the world’s second biggest oil consumer, although analysts warn a significant economic reopening is likely to be months away.
The dollar , which typically trades inversely with oil, jumped after data showed that U.S. employers added more jobs than expected in November while average hourly earnings also increased, potentially giving the Federal Reserve more incentive to raise interest rates.
Oil steadies ahead of OPEC+ meeting, EU Russian oil ban
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