Crude oil prices edge higher as optimistic investors await OPEC meeting

Benchmark Brent crude was trading at $81.43 per barrel on November 24.

Crude oil price inched higher on November 24 as market participants remain on edge ahead of the Organization of Petroleum Exporting Countries (OPEC) meeting next week, amid expectations that the cartel would extend supply cuts to support crude prices.

Benchmark Brent crude was trading at $81.43 per barrel on November 24. Prices declined almost  0.7 percent to end near $81 a barrel on November 23 after the OPEC meeting was delayed by a few days.

OPEC and its allies, commonly known as OPEC+, were scheduled to meet on November 26. That meeting is now set to be conducted on November 30, when the oil cartel might extend or deepen supply cuts to support crude prices.

The delay sent jitters in the market as global traders took cues that the cartel might not deepen the cuts while concerns loom over oversupply in 2024. “Oil supply is expected to increase by 1.7mb/d (million barrels per day) to 101.8mb/d in 2023 and by 1.6mb/d in 2024, taking the supply up at 103.4mb/d,” brokerage Yes Securities said in a report.

While OPEC members Saudi Arabia and Russia have already pledged output cuts, concerns over demand from China, the world’s largest energy consumer, are dampening sentiment.

China’s oil demand growth is likely to ease in the first half of 2024 to around 4%, with resurgent consumption from the aviation and petrochemical sectors offset by weaker diesel usage due to an ongoing property sector crunch, Reuters reported on Thursday, citing consultancies.

Meanwhile, India’s crude oil imports rose 2.2 percent in October and by 0.6 percent in the April-October period, according to data from Petroleum Planning and Analysis Cell. The data released on Thursday showed that the country's fuel consumption jumped to a four-month high in October, on the back of increased industrial activity.

“India’s oil demand is expected to grow by 0.26mb/d in 2023 and so imports are expected to reach a new high in 2023. A broad-based expansion across sectors has supported the economic growth of the country, primarily led by the services sector, and benefited from improvements in manufacturing activities. India’s economic activities are anticipated to leave behind other key economic economies,” Yes Securities added.