The U.S. crude futures traded 0.9 per cent down at $74.86 barrel and the Brent contract declined 0.7 per cent to $79.94 a barrel
Oil prices settled lower Monday as traders looked ahead to a virtual OPEC+ meeting this week that will set the trajectory of oil output into next year.
By 19:30 GMT, the U.S. crude futures traded 0.9 per cent down at $74.86 barrel and the Brent contract declined 0.7 per cent to $79.94 a barrel.
The crude benchmarks logged their first positive week in five last week, but the tone turned negative after the OPEC and allies, including Russia, a group known as OPEC+, delayed its meeting to discuss output levels going into 2024.
The group is now scheduled to meet on Thursday, and remotely rather than in person in Vienna, instead of Sunday as initially planned, reportedly after Angola and Nigeria expressed unhappiness over their lower 2024 production targets.
The group has reportedly moved closer to a compromise, after the delay late last week, but uncertainty still reigns.
OPEC+, led by Saudi Arabia and Russia, agreed to substantially cut supply this year, amid growing concerns that high interest rates and worsening economic conditions will hurt global oil demand.
Expectations are that Saudi Arabia will at least roll over its additional voluntary curb of 1MMbbls/d into 2024. Clearly, if we do not see this, it would put further downward pressure on the market, given the excess over 1Q24, ING analysts said in a note.
We believe that the Saudis will roll over this cut and there is a growing possibility that we see a deeper cut from the broader group. In doing this, the group would provide good support to the market going into 2024, they added.
Investors will also be keeping an eye on the latest U.S. inventories data, after the official EIA (Energy Information Administration) figures showed a considerably bigger-than-expected rise last week, with U.S. production remaining near record highs.
This was the fourth successive week of builds for U.S. inventories, with U.S. production staying near record highs.
