Oil slips amid slow holiday trade before next week's OPEC meeting; group agrees to cut output

  • Next week's meeting of the OPEC and allies including Russia is high on investors' list of things to watch

  • Russian oil companies proposed on Thursday not to change their output quotas, putting pressure on OPEC+ to avoid any major shift in the policy

  • China warned the US that it would take firm countermeasures in response to US legislation backing anti-government protesters in Hong Kong

Tokyo: Oil prices slipped on Friday in quiet trade with the US Thanksgiving holiday limiting activity, while investors awaited a meeting of OPEC and its allies next week that may result in the extension of an output cut agreement to support the market.

Brent crude futures declined 28 cents, or 0.4 percent, at $63.59 a barrel. Brent futures are set for a slight gain of 0.3 percent for the week, the fourth weekly increase, during which prices have climbed 3.1 percent.

West Texas Intermediate (WTI) futures were down 15 cents, or 0.3 percent, at $57.97 a barrel.

 Oil slips amid slow holiday trade before next weeks OPEC meeting; group agrees to cut output

Representational image. AFP

For the week, WTI is set to gain 0.4 percent, the fourth weekly increase, during which prices have risen 3.2 percent.

Next week’s meeting of the Organisation of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, is high on investors’ list of things to watch.

The group has agreed to cut its output by 1.2 million barrels per day through to March to support prices and analysts expect the agreement to be extended as US production keeps hitting records.

“It is highly probable that the group will rollover the deal in its current form until at least the end of 2020, but we see limited scope for a new round of cuts, in light of uneven compliance and diminishing returns,” Fitch Solutions said in a note.

Russian oil companies proposed on Thursday not to change their output quotas, putting pressure on OPEC+ to avoid any major shift in the policy when the group meets in Vienna on 5-6 December.

Still, “risk-neutral is an excellent spot to be ahead of the weekend as there is a ton of headline risk that could upset the apple cart,” said Stephen Innes chief Asia market strategist at AxiTrader.

China warned the United States on Thursday that it would take “firm countermeasures” in response to US legislation backing anti-government protesters in Hong Kong.

Investors are concerned any such move by China would further delay a preliminary agreement with the United States to end their trade war that has held back growth in global economies and in the consumption of oil.

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Updated Date: Nov 29, 2019 15:57:05 IST