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LONDON: Oil prices fell on Monday, with the Brent benchmark dropping below $80 a barrel as investors awaited this week’s OPEC+ meeting and expected curbs on supplies into 2024.

Brent crude futures were down 91 cents, or 1.1%, at $79.67 a barrel by 1217 GMT. U.S. West Texas Intermediate (WTI) crude futures lost 89 cents, or 1.2%, to $74.65.

Both contracts lost $1 in early trading, having registered their first weekly gains in five last week on expectations that Saudi Arabia and Russia could roll over voluntary supply cuts into early 2024 and OPEC+ might discuss plans to reduce output further.

However, prices tumbled in the middle of the week after the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together known as OPEC+, postponed a ministerial meeting to Nov. 30 to iron out differences on production targets for African producers.

Since then the group has moved closer to a compromise, four OPEC+ sources told Reuters on Friday.

Oil prices steady ahead of OPEC+ oil production decision

ING analysts said market sentiment remains negative given the dispute within OPEC+ over production quotas, though they expect Saudi Arabia to roll over its additional voluntary cut of 1 million barrels per day (bpd) into next year.

“Clearly, if we do not see this, it would put further downward pressure on the market,” ING analysts said in a note.

Estimated exports by OPEC countries have declined to 1.3 million bpd below levels in April, Goldman Sachs analysts said in a note, in line with the group’s supply targets.

“We still expect an extension of the unilateral Saudi and Russia cuts through at least the first quarter of 2024,” the bank added.

The United Arab Emirates, however, is poised to ramp up exports of Murban crude early next year, according to traders and Reuters data.

In the United States, higher crude stockpiles could also put downward pressure on prices, analysts have said.

Meanwhile, efforts by Iraq to resume northern crude exports via Turkey are ongoing. Iraqi oil officials will meet representatives of international oil companies and Iraqi Kurdish officials in early December to discuss contract changes central to the issue, a deputy minister said.

The International Energy Agency said it expects a slight surplus in global oil markets in 2024 even if OPEC+ nations extend their cuts into next year.

Commonwealth Bank analyst Vivek Dhar said: “With the IEA forecasting that global oil demand will only grow 0.9 million bpd next year, down from 2.4 million bpd growth in 2023, OPEC+ will have to show significant supply discipline, or at least jawbone such ability, to alleviate market worries of a deep surplus in oil markets next year.”

Oil prices have also stabilised after geopolitical tensions dialled down in the Middle East following a ceasefire in Gaza and an exchange of hostages.

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