Stabilization ahead of OPEC supply meeting as volatility falls

Stabilization ahead of OPEC supply meeting as volatility falls

2024-12-03 07:13:35 :

(Bloomberg) — Oil prices were little changed as traders looked for clues on OPEC’s supply plans ahead of a key meeting on Thursday.

Brent crude ended just 1 cent lower on Monday and is currently trading near $72 a barrel, while West Texas Intermediate crude is trading above $68 a barrel. Recent price action has been subdued, with implied volatility falling to around lowest level in two months. Traders still expect producer groups to further delay resuming some production amid concerns about a supply glut next year.

Oil prices initially rose on Monday on signs of gradual economic recovery in top importer China, but gave up gains as the dollar strengthened, making the commodity less attractive. Futures have been trading in a range just above $6 since mid-October, influenced by geopolitical developments in the Middle East and Russia and the outlook for Chinese demand.

“Despite ongoing headwinds, we have reached fair value for Brent at current levels, which looks sticky in the short term,” said Chris Weston, head of research at Pepperstone Group. “For now, the oil market is happy to adjust positions and is ready to react as new news comes out.”

In the Middle East, Israel said it remained committed to a ceasefire after launching airstrikes in Lebanon in response to Hezbollah’s first attack during the truce. Meanwhile, in Syria, conflict erupted as rebels attacked major cities.

Elsewhere, cooler-than-usual temperatures in Europe at the start of the northern hemisphere winter led to a glimmer of bullishness in diesel prices, including heating oil, which is still commonly used in the region. Speculators cut short bets on refined oil products for a fourth straight week, the longest stretch since February.

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