Oil prices steadied on Nov. 27, depressed by record Saudi production but supported by expectations that oil exporters would agree to cut output at an OPEC meeting next week.
Benchmark North Sea Brent crude oil LCOc1 was unchanged at $60.48 a barrel by 1225 GMT, not far above a 13-month low of $58.41 reached on Nov. 23. U.S. light crude CLc1 was down 10 cents at $51.53.
Oil prices are down by almost a third since early October, weighed down by an emerging supply overhang and widespread financial market weakness.
Prices rallied sharply on Nov. 26, with Brent rising almost 2.9%, but the market has struggled to stay positive.
“The energy complex is making a half-hearted attempt to extend gains,” said Stephen Brennock, analyst at London brokerage PVM Oil. “However, upside potential is being capped by two upcoming risk events, namely the G20 summit and next week’s OPEC meeting.”
“A wait-and-see approach is therefore likely to prevail, which in turn will act as a damper on any looming price swings.”
Leaders of the Group of 20 nations (G20), the world’s biggest economies, meet on Nov. 30 and Dec. 1, with the trade war between Washington and Beijing top of the agenda. With the top three crude producers—Russia, the United States and Saudi Arabia—all present, oil policy is expected to be discussed.
OPEC meets in Vienna on Dec. 6 to discuss output policy together with some non-OPEC producers, including Russia.
Saudi Arabia raised oil production to a record high in November, an industry source said on Nov. 26, pumping 11.1 MMbbl/d to 11.3 Mmbbl/d.
But the kingdom has been pushing for a collective production cut by members of the Organization of the Petroleum Exporting Countries, indicating it could reduce supply by 500,000 bbl/d.
“We suspect that producers will start to withhold exports in the coming months, putting a floor under prices,” Capital Economics said.
Fereidun Fesharaki, chairman of energy consultancy FGE, said that a failure by OPEC and Russia to cut supply significantly would mean crude prices would “fall further, perhaps (with) Brent at $50 per barrel and WTI of $40 per barrel or less.”
Recommended Reading
Pembina Pipeline Enters Ethane-Supply Agreement, Slow Walks LNG Project
2024-02-26 - Canadian midstream company Pembina Pipeline also said it would hold off on new LNG terminal decision in a fourth quarter earnings call.
Williams Beats 2023 Expectations, Touts Natgas Infrastructure Additions
2024-02-14 - Williams to continue developing natural gas infrastructure in 2024 with growth capex expected to top $1.45 billion.
TC Energy’s Keystone Back Online After Temporary Service Halt
2024-03-10 - As Canada’s pipeline network runs full, producers are anxious for the Trans Mountain Expansion to come online.
Enbridge Announces $500MM Investment in Gulf Coast Facilities
2024-03-06 - Enbridge’s 2024 budget will go primarily towards crude export and storage, advancing plans that see continued growth in power generated by natural gas.
Enbridge Fortifies Dominant Role in Corpus Christi Crude Transport
2024-03-20 - Colin Gruending, Enbridge executive vice president and president for liquids pipelines told Hart Energy the company’s holdings in South Texas are akin to a “catcher’s mitt” for Permian and Haynesville production.