Oil prices dip slightly amidst anticipation of mixed supply news

November 22, 2023 (MLN): Oil prices edged lower on Wednesday as the market awaited mixed news on the supply front with OPEC+ expected to discuss output cuts and the U.S. crude stocks forecast to show a big build-up.

Brent crude is currently trading at $82.34 per barrel, down by 0.12% on the day.

While West Texas Intermediate crude (WTI) is trading at $77.68 per barrel, down by 0.14% on the day.

Both benchmarks have fallen for four straight weeks, and prices weakened further last week on growing concerns about a weaker demand outlook.

Investors remained cautious ahead of Sunday's scheduled OPEC+ meeting, when the producer group may discuss deepening supply cuts due to slowing global economic growth, as Reuters reported.

On Monday, both contracts climbed about 2% after three OPEC+ sources told Reuters the group, the Organization of the Petroleum Exporting Countries (OPEC) and allied producers, was set to consider additional oil supply cuts when it meets on November 26.

OPEC+ is likely to extend or even deepen oil supply cuts into next year, analysts have predicted. "While market consensus suggests Saudi Arabia and Russia will be extending voluntary cuts into 2024, any further cuts by other members will hold the key to future prices," ANZ analysts wrote in a note.

Even if the OPEC+ nations extend their cuts into next year, the global oil market will see a slight supply surplus in 2024, the head of the International Energy Agency's (IEA) oil markets and industry division said on Tuesday.

U.S. crude stocks rose by nearly 9.1 million barrels in the week ended November 17, according to market sources citing American Petroleum Institute figures on Tuesday.

Gasoline inventories dropped by about 1.79m barrels, while distillate inventories fell by about 3.5m barrels.

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