Oil prices fluctuate ahead of the OPEC+ meeting as the Bank of Korea surprises with a rate cut.

Oil prices edge slightly lower ahead of the key OPEC+ meeting, while the Bank of Korea shocks markets with a second consecutive rate cut, signaling significant economic challenges in Asia.

Share:

Oil markets remain relatively stagnant as investors await the OPEC+ meeting, scheduled for December 1, to receive guidance on future production. At 11:17 am Singapore time, the January Brent contract was trading at $72.70 per barrel, down 0.18%, while the January NYMEX light crude contract dropped to $68.58 per barrel, down 0.2%.

The OPEC+ meeting has garnered particular attention amidst ongoing imbalances between supply and demand. Initially planned as an in-person event in Vienna, the meeting will now be held online, reflecting internal tensions, including some members failing to meet quotas. Despite challenges linked to declining Chinese consumption, growing demand in advanced economies partially offsets this decline, creating contrasting dynamics in global markets.

US oil stocks decline

In the United States, commercial crude oil stocks decreased by 1.84 million barrels, reaching 428.45 million barrels for the week ending November 22, according to the US Energy Information Administration (EIA). However, this draw was lower than the American Petroleum Institute’s (API) forecast, which predicted a reduction of 5.94 million barrels.

Gasoline stocks on the US East Coast hit a two-year low at 50.64 million barrels as demand surged ahead of the extended Thanksgiving weekend. The American Automobile Association (AAA) estimates that 71.7 million people will travel by car, marking a historic record.

Surprise in South Korea

In Asia, the Bank of Korea (BOK) surprised markets by lowering its key interest rate by 25 basis points to 3%, marking a second consecutive cut. This decision, unprecedented since the 2008-2009 global financial crisis, reflects an effort to support a slowing economy.

The rate cut comes as South Korean inflation has dropped below 2%, fueling debates over the necessity of preventive measures against global economic headwinds. According to Deepali Bhargava and Min Joo Kang, economists at ING, this strategy aims to mitigate the impact of weakening domestic demand.

US outlook

In the United States, the Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred measure of inflation, increased by 2.3% in October compared to the previous year. The core PCE, which excludes volatile elements like energy and food, stood at 2.8%, in line with expectations.

These figures are expected to influence discussions during the Federal Open Market Committee’s (FOMC) final meeting of the year, scheduled for December 17-18. Currently, markets estimate a 66.5% probability of a 25 basis point rate cut, according to CME’s FedWatch tool.

Dubai crude

Meanwhile, Dubai crude swaps showed a slight decline. The January swap stood at $71.29 per barrel at 10 am Singapore time, down 0.39% from the previous day.

A bulk carrier operated by a Greek company sailing under a Liberian flag suffered a coordinated attack involving small arms and explosive drones, prompting an Israeli military response against Yemen's Houthis.
The Canadian government is now awaiting a concrete private-sector proposal to develop a new oil pipeline connecting Alberta to the Pacific coast, following recent legislation intended to expedite energy projects.
Petrobras is exploring various strategies for its Polo Bahia oil hub, including potentially selling it, as current profitability is challenged by oil prices around $65 per barrel.
Brazilian producer Azevedo & Travassos will issue new shares to buy Petro-Victory and its forty-nine concessions, consolidating its onshore presence while taking on net debt of about USD39.5mn.
Major oil producers accelerate their return to the market, raising their August quotas more sharply than initially expected, prompting questions about future market balances.
Lindsey refinery could halt operations within three weeks due to limited crude oil reserves, according to a recent analysis by energy consultancy Wood Mackenzie, highlighting an immediate slowdown in production.
The flow of crude between the Hamada field and the Zawiya refinery has resumed after emergency repairs, illustrating the mounting pressure on Libya’s ageing pipeline network that threatens the stability of domestic supply.
Libreville is intensifying the promotion of deep-water blocks, still seventy-two % unexplored, to offset the two hundred thousand barrels-per-day production drop recorded last year, according to GlobalData.
The African Export-Import Bank extends the Nigerian oil company’s facility, providing room to accelerate drilling and modernisation by 2029 as international lenders scale back hydrocarbon exposure.
Petronas begins a three-well exploratory drilling campaign offshore Suriname, deploying a Noble rig after securing an environmental permit and closely collaborating with state-owned company Staatsolie.
Swiss commodities trader Glencore has initiated discussions with the British government regarding its supply contract with the Lindsey refinery, placed under insolvency this week, threatening hundreds of jobs and the UK's energy security.
Facing an under-equipped downstream sector, Mauritania partners with Sonatrach to create a joint venture aiming to structure petroleum products distribution and reduce import dependency, without yet disclosing specific investments.
Oil companies may reduce their exploration and production budgets in 2025, driven by geopolitical tensions and financial caution, according to a new report by U.S. banking group JP Morgan.
Commercial oil inventories in the United States rose unexpectedly last week, mainly driven by a sharp decline in exports and a significant increase in imports, according to the US Energy Information Administration.
TotalEnergies acquires a 25% stake in Block 53 offshore Suriname, joining APA and Petronas after an agreement with Moeve, thereby consolidating its expansion strategy in the region.
British company Prax Group has filed for insolvency, putting hundreds of jobs at its Lindsey oil site at risk, according to Sky News.
Orlen announces the definitive halt of its Russian oil purchases for the Czech Republic, marking the end of deliveries by Rosneft following the contract expiry, amid evolving logistics and diversification of regional supply sources.
Equinor and Shell launch Adura, a new joint venture consolidating their main offshore assets in the United Kingdom, aiming to secure energy supply with an expected production of over 140,000 barrels of oil equivalent per day.
Equinor announces a new oil discovery estimated at between 9 and 15 mn barrels at the Johan Castberg field in the Barents Sea, strengthening the reserve potential in Norway's northern region.
Sierra Leone relaunches an ambitious offshore exploration campaign, using a 3D seismic survey to evaluate up to 60 potential oil blocks before opening a new licensing round as early as next October.