Oil down 2%, posts weekly loss as investors see limited effect of OPEC+ supply cuts; Brent at $78/bbl

  • OPEC+ producers agreed on Thursday to remove around 2.2 million barrels per day of oil from the global market in the first quarter of next year, with the total including a rollover of Saudi Arabia and Russia's 1.3 million bpd of current voluntary cuts

Livemint, Edited By Nikita Prasad
Published2 Dec 2023, 07:25 PM IST
Brent crude futures for February settled down $1.98, or 2.45 per cent, at $78.88 a barrel.
Brent crude futures for February settled down $1.98, or 2.45 per cent, at $78.88 a barrel.

Oil prices declined more than 2 per cent in the previous session as investors remained cautious over the depth of supply cuts announced by the Organisation of Petroleum Exporting Countries and its allies (OPEC+). Concerns over sluggish global manufacturing activity also weighed on market sentiments.

Brent crude futures for February settled down $1.98, or 2.45 per cent, at $78.88 a barrel. US West Texas Intermediate crude futures (WTI) dropped $1.89, or 2.49 per cent, to $74.07 a barrel. For the week, Brent posted a decline of about 2.1 per cent, while WTI lost more than 1.9 per cent, according to news agency Reuters.

Back home, on the Multi Commodity Exchange (MCX), crude oil futures due for a December 18 expiry, settled lower by 0.8 per cent at 6,231 per bbl, having swung between 6,210 and 6,409 per bbl during the session, against a previous close of 6,281 per barrel.

Also Read: Stock Picks: ONGC, Oil India among top picks for Motilal Oswal in upstream sector, Indian Oil among OMCs

What's weighing on crude oil prices?

-OPEC+ producers agreed on Thursday to remove around 2.2 million barrels per day (bpd) of oil from the global market in the first quarter of next year, with the total including a rollover of Saudi Arabia and Russia's 1.3 million bpd of current voluntary cuts. Traders viewed the announcement with some skepticism, say analysts.

-OPEC+, which pumps more than 40 per cent of the world's oil, is reducing output after prices fell from about $98 a barrel in late September on concerns about the impact of sluggish economic growth on fuel demand.

-The cuts agreed by OPEC+ on Thursday are voluntary, so there was no collective revision of OPEC+ production targets. The voluntary nature of the cuts led to some skepticism about whether or not producers would fully implement them, and also from what basis the cuts would be measured.

-In the US, Federal Reserve Chair Jerome Powell said that the central bank would move "carefully" on interest rates as risks of “under- and over-tightening are becoming balanced.” US manufacturing remained subdued and factory employment fell in November, according to a survey.

-Investors are keeping a watchful eye on global manufacturing activity, which remained weak during the month on poor demand, according to surveys. On the supply side, the US on Friday imposed additional sanctions related to the price cap on Russian oil, targeting three entities and three oil tankers.

-On Friday, talks to extend a week-long truce between Israel and Palestinian militant group Hamas collapsed, prompting a resumption in the war in Gaza. The conflict had initially supported oil prices on concerns that any escalation that involved oil producers could disrupt supply. So far, the conflict has had no significant impact on global oil flows.

Also Read: India's crude oil output up 1.3% to 2.5 MMT in October, imports rise after four months of declines: PPAC

Where are prices headed?

Rebound in the dollar index from nearly 4-month lows also pushed oil prices lower. Crude oil prices also fell as output cuts announced by OPEC+ came in lower than market expectations, according to analysts.

‘’Output cut is also voluntary and the market is not expecting 100 per cent compliance on output cuts. Crude oil is having support at $74.85–74.10 and resistance at $76.50-77.20. In INR terms, crude oil has support at Rs6,320-6,240 while resistance is at 6,480-6,550,'' said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.

Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

MoreLess
First Published:2 Dec 2023, 07:25 PM IST
Business NewsMarketsCommoditiesOil down 2%, posts weekly loss as investors see limited effect of OPEC+ supply cuts; Brent at $78/bbl

Most Active Stocks

Tata Steel share price

149.70
07:18 PM | 1 NOV 2024
1.05 (0.71%)

Indian Oil Corporation share price

145.00
07:19 PM | 1 NOV 2024
2.3 (1.61%)

Tata Power share price

445.20
07:19 PM | 1 NOV 2024
5.15 (1.17%)

Bandhan Bank share price

183.65
07:10 PM | 1 NOV 2024
1.4 (0.77%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Jubilant Pharmova share price

1,273.00
06:59 PM | 1 NOV 2024
60.65 (5%)

UTI Asset Management Company share price

1,369.00
06:59 PM | 1 NOV 2024
32.3 (2.42%)

Fortis Healthcare share price

632.70
06:59 PM | 1 NOV 2024
6.6 (1.05%)

Suven Pharmaceuticals share price

1,328.65
07:18 PM | 1 NOV 2024
13.15 (1%)
More from 52 Week High

Rainbow Childrens Medicare share price

1,545.00
06:59 PM | 1 NOV 2024
-67.25 (-4.17%)

ICICI Securities share price

833.45
06:59 PM | 1 NOV 2024
-32.85 (-3.79%)

Vijaya Diagnostic Centre share price

966.70
06:59 PM | 1 NOV 2024
-30.35 (-3.04%)

Narayana Hrudayalaya share price

1,235.60
06:59 PM | 1 NOV 2024
-36.75 (-2.89%)
More from Top Losers

Brigade Enterprises share price

1,244.80
07:19 PM | 1 NOV 2024
71.75 (6.12%)

PCBL share price

432.15
07:17 PM | 1 NOV 2024
21.35 (5.2%)

Piramal Pharma share price

281.85
07:17 PM | 1 NOV 2024
13.45 (5.01%)

Jubilant Pharmova share price

1,273.00
06:59 PM | 1 NOV 2024
60.65 (5%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    81,355.00170.00
    Chennai
    81,361.00170.00
    Delhi
    81,513.00170.00
    Kolkata
    81,365.00170.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    102.98/L0.00
    Chennai
    100.80/L0.00
    Kolkata
    104.95/L0.00
    New Delhi
    94.77/L0.00

    Popular in Markets

      HomeMarketsPremiumInstant LoanMint Shorts