Oil prices stabilise after slump on underwhelming OPEC+ cuts

OPEC+, which pumps over 40% of the world’s oil, is focusing on reducing output as prices have fallen from about $98 in late September amid concerns over weaker economic growth in 2024.

The market received the news with scepticism and confusion, driven by concerns about compliance given the voluntary nature of the reductions, ongoing macroeconomic headwinds, and investors’ prior expectations of deeper cuts.

"Markets may have been pricing in another larger cut, and it just didn't meet those expectations," OANDA analyst Craig Erlam said.

The cuts "will not stop a billowing cloud of confusion that is going to take the oil market weeks and months to figure out and only if the self-reporting data is indeed reliable," PVM analyst John Evans said.

"The only real hope for long term balance in the market is for a dramatic improvement in global economic data as we start the new year," Onyx Capital Group CEO Greg Newman said.

U.S. manufacturing contracted for the 13th consecutive month in November with a PMI score of 46.7, missing economists’ forecast of 47.6. Factory data remained weak across the globe in November on poor demand, surveys showed.

Investors will also be looking ahead to comments by Federal Reserve Chair Jerome Powell later on Friday.

Chicago Fed President Austan Goolsbee said inflation is on track for the Fed’s 2% target on Friday.

Elsewhere, at the two-week COP28 summit in the UAE on Friday, U.N. Secretary General Antonio Guterres called for a future with no fossil fuel burning at all.