Oil prices drift higher with OPEC+ in sight; econ. data deluge on tap

Oil prices rose slightly in Asian trade on Monday with focus remaining squarely on an upcoming OPEC+ meeting this week, while anticipation of a string of key economic readings also kept traders on edge.

Crude prices sank for a fifth straight week as hopes of more supply cuts by the Organization of Petroleum Exporting Countries and allies (OPEC+) were largely offset by a delay in the meeting, to Nov. 30 from Nov. 26, especially as reports suggested the delay was caused by disagreements over production levels.

Brent oil futures expiring January rose 0.2% to $80.75 a barrel, while West Texas Intermediate crude futures expiring January rose 0.2% to $75.67 a barrel by 20:24 ET (01:24 GMT). Both contracts closed marginally lower in the past week.

OPEC+ production cuts take center stage
Saudi Arabia and Russia- two of the top producers in the OPEC+, are largely expected to extend or deepen their ongoing supply reductions. The two led the OPEC+ in curbing supply this year, amid growing fears that high interest rates and worsening economic conditions will dent global oil demand.

But production in other OPEC+ members was seen increasing in recent months. Reuters reports also showed that some African nations planned to increase production at the upcoming meeting, which clashed with the plans of de-facto OPEC+ leader Saudi Arabia.

Increased production by some OPEC+ members, coupled with record-high U.S. production and growing Chinese stockpiles made oil markets appear not as tight as initially thought this year. The trend is likely to draw more production cuts from Saudi Arabia and Russia, which analysts expect will tighten supply going into 2024.

Inflation, business activity readings on tap
Oil markets were also cautious before a string of major economic readings this week, starting with euro zone inflation on Thursday. The bloc slipped into a technical recession in the third quarter, ramping up concerns over slowing crude demand.

Chinese purchasing managers index data is due on Thursday, and is set to offer more cues on business activity in the world’s largest oil importer. Economic activity in the country has remained largely languid in recent months which, coupled with surging oil inventories, could spur a slowdown in Chinese oil demand.

A second reading on U.S. gross domestic product data for the third quarter is also on tap this week, as is a reading on PCE prices- the Federal Reserve’s preferred inflation gauge. Both readings are expected to show continued resilience in the U.S. economy.

But U.S. oil demand is set to cool in the coming months, as the winter season restricts travel.