Oil steady ahead of interest rate decisions, OPEC+ supply cut doubts
Oil prices held steady on Tuesday ahead of key interest rate policy and inflation data announcements, and amid doubts that production cuts by OPEC+ next year would offset crude oversupply and weaker fuel demand growth.
Brent crude futures for February were flat at $76.03 a barrel as of 0103 GMT, while U.S.
West Texas Intermediate crude futures for January delivery were up 3 cents at $71.35 a barrel.
Both the contracts settled marginally higher on Monday, with Brent up 19 cents at $76.03 a barrel and WTI up 9 cents at $71.32.
The Organization of the Petroleum Exporting Countries and allies, together called OPEC+, have pledged to cut 2.2 million barrels per day (bpd) for the first quarter of 2024. But investors remain sceptical that total supply will drop, as output growth in non-OPEC countries is expected to lead to excess supply next year.
«Growth at US shale oil operations continues to surprise on the upside, while gains across other non-OPEC producers have been unexpectedly large,» said ANZ Research analysts in a note.
Brent crude prices have dropped from above $80 a barrel at the start of December while WTI slipped from over $77.
Both WTI and Brent are in a contango market structure, when prompt contracts are less than later-dated contracts, for first several months of 2024. That indicates investors feel there is lower demand for crude or adequate supply for those months.
«The market should get a fresh take on fundamentals when OPEC and the International Energy Agency release their monthly oil market reports this week. The oil market is also watching negotiations at COP28.»
A draft of a potential climate deal at the COP28 summit on Monday suggested measures countries could take to slash greenhouse gas
