Global oil prices experienced a fourth consecutive day of decline as traders anticipated the delayed OPEC+ meeting later this week, coupled with a prevailing risk-off sentiment in broader financial markets.
Brent crude fell below $80 a barrel, representing a 2.3% retreat over the last three sessions while West Texas Intermediate hovered around $75.
The OPEC+ meeting, originally scheduled for November 26, faced a four-day postponement to November 30 due to disagreements over production quotas.
Despite a Bloomberg survey indicating that approximately half of traders and analysts expect additional measures from OPEC+ to tighten the market, oil prices weakened.
The recent decline in crude futures, down nearly 20% from late September, is attributed to increased supply from non-OPEC+ countries and the diminishing risk premium related to the Israel-Hamas conflict.
The International Energy Agency’s prediction of a market surplus next year further contributed to market concerns.
Analysts emphasize the importance of OPEC+ demonstrating significant supply discipline to alleviate apprehensions about a potential oil surplus in 2024.
Market indicators, such as WTI’s prompt spread in contango, suggest deteriorating conditions, reflecting a bearish sentiment.
Meanwhile, in the Middle East, a chemical tanker with ties to an Israeli-affiliated company was boarded in the waters between Yemen and Somalia, underscoring the vulnerability of shipping in the region.
On a different note, the upcoming COP28 summit in the United Arab Emirates, starting Thursday, adds complexity as the summit’s president also heads the OPEC-producing state oil company, making it a contentious climate summit.
