Mumbai, 05 Dec (Commoditiescontrol): Crude oil prices gained modestly on Thursday as the market awaited a pivotal decision from OPEC+ on production cuts while keeping a watchful eye on escalating tensions in the Middle East.
Brent crude futures rose by 12 cents, or 0.2%, to $72.43 a barrel, while U.S. crude futures edged up by 16 cents, or 0.2%, to $68.70 per barrel. These minor gains followed a nearly 2% decline in both benchmarks during the previous session.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, convened virtually on Thursday to discuss the extension of their current oil production cuts. Sources familiar with the matter suggested that the group is inclined to prolong these cuts by at least three months from January. The move is aimed at stabilizing the market amid a fragile global demand recovery.
Market analysts are divided on the potential course of action. While some believe OPEC+ may prioritize supporting prices by extending production limits, others speculate that easing cuts could signal a shift toward defending market share. The outcome of the meeting is expected to drive short-term volatility in oil markets.
Adding to the price momentum, the Energy Information Administration (EIA) reported a larger-than-anticipated drop in U.S. crude inventories last week as refiners ramped up operations. However, gasoline and distillate stockpiles rose beyond expectations, tempering the bullish sentiment.
In the geopolitical landscape, the Middle East remains a source of market unease. Israel has warned of deeper incursions into Lebanon should the fragile truce with Hezbollah collapse. Meanwhile, U.S. intelligence sources indicated that Hezbollah, weakened by Israeli strikes, might attempt to rebuild its military capabilities, posing a long-term threat to regional stability.
On the diplomatic front, U.S. President-elect Donald Trump’s envoy has traveled to Qatar and Israel in a bid to broker a ceasefire in Gaza and secure a hostage release deal before the January inauguration. These developments could influence the broader oil market as geopolitical risks remain intertwined with energy dynamics.
Market experts anticipate a potential rally in crude prices by year-end, underpinned by expectations of U.S. economic recovery and sustained Middle East tensions. As the OPEC+ decision looms, investors remain cautiously optimistic about the trajectory of global oil markets.
(By Commoditiescontrol Bureau: 09820130172)
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