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Oil drops as investors await OPEC+ meeting


Brent crude futures were lower 60 cents, or 0.7 per cent, at $79.98 a barrel and U.S. WTI crude futures shed 68 cents, or 0.9 per cent, to $74.86

Oil prices dropped on Monday, with the Brent benchmark slipping below $80 a barrel as investors awaited this week’s OPEC+ meeting and expected cuts on supplies into 2024.

Brent crude futures were lower 60 cents, or 0.7 per cent, at $79.98 a barrel. U.S. West Texas Intermediate (WTI) crude futures shed 68 cents, or 0.9 per cent, to $74.86. Both contracts shed $1 in early trading.

Last week, prices slid when OPEC+ – the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia – delayed to November 30 a ministerial meeting to iron out differences on production targets for African producers.

Since then the group, helmed by de facto leader Saudi Arabia, has moved closer to a compromise, OPEC+ sources told Reuters on Friday. OPEC+ is looking at deepening oil production curbs despite its policy meeting being delayed to this Thursday, an OPEC+ source said on Monday.

Although there are headlines that Saudi has made progress reaching consensus, there is limited risk appetite to buy crude ahead of the formal announcement, said Rebecca Babin, senior energy trader at CIBC Private Wealth US.

Until we get clarity on how this plays out, expect crude to struggle to rally, Babin said.

ING analysts said they expected Saudi Arabia to roll over its additional voluntary cut of 1 million barrels per day (bpd) into next year, and Russia to extend its own cuts.

Clearly, if we do not see this, it would put further downward pressure on the market, they stated in a note.

Estimated exports by OPEC countries have dropped to 1.3 million bpd below levels in April, Goldman Sachs analysts said in a note, in line with the group’s supply targets.

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