Crude oil prices continued to rally ahead of the Organisation of Petroleum Exporting Countries (OPEC) meeting on November 30 to discuss supply cuts for 2024.
The benchmark Brent crude settled at $81.68 a barrel, up 2 percent, on November 28, while West Texas Intermediate (WTI) closed at $76.41.
“With the continuation of the expectations amongst the market participants that the OPEC+ producer group may deepen and extend output cuts due to concern over softer global demand, oil prices rose about 2%,” StoxBox said in a note.
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OPEC and allies, also known as OPEC+, were to meet on November 26 but the meeting was delayed as the oil-producing countries were unable to come to a conclusion over supply cuts for the coming year.
Crude prices, which tanked and were trading below $80 a barrel, have again started climbing up over supply-cut concerns by OPEC.
The oil cartel is expected to continue to deepen production cuts to support prices. The major oil-producing countries of Saudi Arabia and Russia had already implemented additional voluntary cuts.
Starting July, Saudi Arabia cut production by 1 million barrels per day (bpd), while Russia reduced exports by 300,000 bpd till the end of the year.
Apart from supply concerns, oil prices were supported by declining US inventories. According to a Reuters report, US crude oil inventories dropped by 817,000 barrels last week.
Weak demand from China, which is the largest energy consumer in the world, created downward pressure on prices. Concerns over demand due to a weaker global economy have weighed on prices in November.
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