LONDON: Oil prices rose on Friday but are set to fall for a third week amid signs of slowing demand and as market attention turns to a key meeting of OPEC and its allies this month which will determine the group’s next move on production.
Brent crude futures for January were up 99 cents, or 1.2%, at $81 a barrel at 1451 GMT, while U.S. West Texas Intermediate (WTI) crude futures for December were at $76.67, up 93 cents, also 1.2%.
Both contracts are set to fall about 5% on the week.
“Concerns about demand have replaced the fear of production outages related to the Middle East conflict,” Commerzbank said.
Weak Chinese economic data this week increased worries of faltering demand. Additionally, refiners in China, the largest buyer of crude oil from the world’s largest exporter Saudi Arabia, asked for less supply from Saudi Arabia for December.
The Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+ as the group is known, meet on Nov. 26 to set production policy, and focus will be on whether Saudi Arabia extends a 1 million barrel-per-day voluntary cut set to expire at the end of this year.
“We believe the chances that Saudi Arabia will extend its unilateral … cut well into 1Q24 is certainly increasing given renewed market concerns about Chinese demand and the broader macro outlook,” RBC Capital Markets analyst Helima Croft said.
Analysts at Citi said in a note on Thursday they expected the downward pressure to ease and prices to recover after falling to their lowest since July earlier this week.
“We expect prices to consolidate, and we maintain our near-term price forecasts with support expected to come from refinery maintenance easing and a shift in the risk-reward for investors following the recent sell-off,” Citi said.