Abu Dhabi, UAEMonday 16 December 2019

Oil steady amid muted Thanksgiving trade and ahead of Opec+ meet

Next week's meeting is high on investors' list of things to watch

Opec+ which includes 11 Opec member states and 10 non-Opec nations pledged to cut 2.1 million bpd from the beginning of next year. Reuters
Opec+ which includes 11 Opec member states and 10 non-Opec nations pledged to cut 2.1 million bpd from the beginning of next year. Reuters

Oil prices were steady on Friday in quiet trade with the US Thanksgiving holiday under way, while investors awaited a meeting of Opec and its allies next week that may result in the extension of production cuts.

Brent crude, the most widely-used benchmark, was down 5 cents at $63.82 a barrel, after dropping 0.3 per cent on Thursday.

Whereas, US West Texas Intermediate crude futures was up by 1 cent at $58.12 a barrel.

Next week's meeting of Opec and allies including Russia, a group known as Opec+, is high on investors' list of things to watch.

"At least some clarity is starting to emerge surrounding the Opec meeting, where all parties concerned will attempt to enforce stricter compliance with the existing agreement," said Stephen Innes, chief Asia market strategist at AxiTrader.

The group has been withholding output to support prices and analysts expect the agreement to be extended as US production keeps hitting records.

Russian oil companies proposed on Thursday not to change their output quotas that are part of the deal that runs until March-end next year, putting pressure on Opec+ to avoid any major shift in the policy.

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," Mr Innes said.

China warned the US 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 US to end their trade war that has held back growth in global economies and in the consumption of oil.

The trade dispute between the world's two largest economies has slowed global growth and lowered expectations for oil demand. The two sides have been working towards a detente, with China agreeing to enforce stricter penalties for intellectual property rights violations by its firms.

Updated: November 29, 2019 11:08 AM

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