Oil Prices Steady on Weak Demand Ahead of OPEC+ Decision
Oil prices were flattish on Friday ahead of the Organisation of Petroleum Exporting Countries (OPEC) and allies members’ (OPEC+) meeting this weekend.
The stable price movement is also influenced by Russian-Ukraine peace deal brokered by the United States. Also, US inventories spiked more than expected amidst economic concerns.
China’s imports have slowed down as Beijing’s economic numbers look impressive, with uncertainties clouding its outlook. This has remained negative for crude oil prices in the global commodity market.
Brent Oil Futures expiring in January was muted at $63.35 per barrel, while West Texas Intermediate (WTI) crude futures gained 0.6% to $59.02 per barrel.
With geopolitical developments still fluid, attention has shifted to the weekend OPEC+ meeting, where the producer group is widely expected to avoid raising output.
Delegates have signalled the alliance may instead focus on implementing a long-planned capacity review mechanism as it tries to balance rising non-OPEC supply with still-uneven global demand.
“The fundamental outlook remains fairly similar to where it was at the group’s last meeting,” ING analysts said in a note.
The US Energy Information Administration (EIA) reported that commercial crude inventories rose by 2.8 million barrels last week to 426.9 million barrels, defying market expectations for a 1.3 million-barrel draw.
Strategic petroleum reserves, which are not included in commercial inventories, increased by 500,000 barrels to 411.4 million barrels.
US gasoline stocks also climbed by 2.5 million barrels to 209.9 million barrels, reinforcing perceptions of soft demand in one of the world’s largest oil consumers.
The data added downward pressure on prices by signalling weaker consumption and the potential for further stock builds.
On the geopolitical front, optimism over renewed diplomacy supported expectations that some Russian supply could return to the market. US has been working with Kyiv on a revised framework aimed at bringing the nearly four-year conflict to a negotiated end.
The proposal, discussed in Geneva in recent days, is designed to lay out a path for phased security guarantees and territorial arrangements that Western officials hope could eventually serve as the basis for broader talks with Moscow.
Any credible progress could ease sanctions-linked constraints on Russian oil exports over time, removing part of the geopolitical risk premium embedded in crude prices.
Russian President Vladimir Putin said this week that the U.S.-Ukraine text could form the basis of a future agreement, though he stressed that no final draft had been approved and reiterated that Moscow would not offer major concessions. Conoil to Pay Shareholders N3.5 Final Dividend in Dec.
