The market is shifting its focus to a meeting of ministers from the Organisation of the Petroleum Exporting Countries, which is set for Vienna on December 4.
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But if OPEC fails to stick to this and announces any changes next Friday, this could cause a so-called “short squeeze” on the market.
“Traders are opting to sit on the side lines, especially ahead of the U.S. Thanksgiving holiday”, Stephen Innes, a senior foreign exchange trader for OANDA, said in a commentary. Based on data for the selected major metropolitan areas surveyed in EIA’s Gasoline and Diesel Fuel Update, retail gasoline prices as of November 23 range from a low of $1.83/g in Houston, Texas, to $2.79/g in Los Angeles, California. South Korea’s Kospi .KS11 lost 0.2 percent and Hong Kong’s Hang Seng .HSI dropped 0.5 percent.
“We highly value our interaction within consultations on the situation in the oil market between OPEC and leading non-OPEC producers”, Novak said. They finished the previous session up 17 cents, or 0.4 percent, at $43.04 a barrel.
The dollar index, which measures the greenback against a basket of currencies, gained 0.02 percent at 99.813, making the currency-denominated oil futures more expensive to other currency holders.
As the 12-member OPEC group prepares to meet next week, Venezuela has warned that crude could drop to as low as the mid-$20s a barrel unless action is taken to stabilize the market. Brent crude fell 45 cents to $45.68 a barrel.
“Although we continue to believe that this would be a non-event, the willingness of Saudi Arabia to cooperate seems to be stronger this time around”.
A reduction in oil output would likely have consequences for bunker buyers, with oversupply, and the resulting global oil glut, having pushed bunker prices this year down to their lowest in over 10 years.
Oil prices turned higher in Asia on Wednesday as diplomats tried to ease geopolitical tensions sparked by Turkey’s shooting down of a Russian fighter jet on the Syrian border.
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“From a fundamental point of view, an increase in OPEC’s production quota is much required; Indonesia’s inclusion into the cartel will add roughly 800,000 barrels a day into the overall production pipeline will give OPEC the ideal excuse to propose a higher quota”, said Gan. Subsequently, WTI CLF6 futures fell strongly and are now trading around the $42.50/b level.
