By Alex Longley
Oil headed for a fourth weekly gain, the longest winning streak since April, before a key OPEC+ meeting next week that will set the path for future production cuts.
Futures held steady near $58 a barrel in New York as the U.S. Thanksgiving holiday reduced trading volumes. Saudi Arabia is likely to signal at the Vienna gathering that it’s no longer willing to compensate for the non-compliance of other members, according to people familiar with the kingdom’s thinking. OPEC and its allies are expected to extend the current supply pact, rather than deepen reductions, a Bloomberg survey shows.
Oil is set for a second monthly gain on optimism Beijing and Washington are close to an initial trade deal, even after the U.S. passed legislation expressing support for Hong Kong protesters, prompting a rebuke from China. An OPEC advisory committee, which analyzes the market before ministerial meetings and sometimes makes policy recommendations, didn’t discuss deeper cuts, according to delegates that asked not to be named.
“The move higher in oil has stalled, with growing noise over what OPEC+ may do when they meet in Vienna,” ING analysts Warren Patterson and Wenyu Yao wrote in a report. “Unfortunately for the bulls, the noise so far is not the most constructive.”
West Texas Intermediate for January delivery slipped 14 cents to $57.97 a barrel on the New York Mercantile Exchange as of 8:24 a.m. local time. There was no settlement Thursday due to the U.S. holiday and all transactions will be booked Friday.
Brent for January settlement, which expires Friday, dropped 0.7% to $63.42 a barrel on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a $5.67 premium to WTI.
Saudi Arabia has largely turned a blind eye over the past year to cheaters within the OPEC+ alliance, cutting its own output more than agreed to offset over-production from the likes of Iraq and Russia. Ministers from the Organization of Petroleum Exporting Countries and its partners will meet in Vienna from Dec. 5 to 6 to decide on policy going forward.
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