Oil prices rose alongside Asian equities, buoyed by signs of a slow recovery in China’s economy, as traders look ahead to Thursday’s OPEC+ meeting for potential policy updates. Brent crude futures were trading around $72 a barrel after a 3% drop last week, while West Texas Intermediate was holding above $68. China’s factory activity grew for a second consecutive month in November, offering tentative signs of a recovery in the world’s largest crude importer, following stimulus measures announced in late September.
In a related development, OPEC+ postponed its scheduled meeting on oil supply by four days, leading traders to anticipate that the group will likely delay a slight increase in production for the third time. Oil prices have remained within a narrow range of less than $6 since mid-October, influenced by geopolitical tensions in the Middle East, Russia, the potential for a second Trump presidency, and China’s economic outlook.
“Oil prices are staying largely within a range, with considerable uncertainty ahead of the OPEC+ meeting,” said Warren Patterson, Head of Commodities Strategy at ING Groep NV. “While there is no immediate need for additional supply next year, the challenge lies in balancing market support while avoiding significant losses in market share.”
In currency markets, the U.S. dollar strengthened after President-elect Donald Trump warned BRICS nations against creating an alternative currency to challenge the dollar.
Meanwhile, in the Middle East, a fragile ceasefire between Israel and Hezbollah, backed by Iran, appeared to hold, although both sides exchanged accusations of ceasefire violations. Additionally, Tehran has pledged support to Syria’s government following insurgent forces’ capture of Aleppo, escalating the conflict in the region.
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