US Crude Turns Positive, Brent Trims Losses on OPEC+ Cut Rumors

  • US crude reverses losses on rumors of OPEC+ production cuts
  • WTI lowest since December 2021, Brent lowest since January 2022
  • Shanghai clashes as COVID protests erupt across China

Nov 28 (Reuters) – Global oil benchmarks fell back from their lowest levels in nearly a year on Monday as U.S. crude ended positive, buoyed by talk of an oil production cut. OPEC+ offsetting concerns about China’s tough COVID-19 restrictions, the world. leading importer of crude.

The price action has been volatile. U.S. West Texas Intermediate (WTI) crude settled 96 cents, or 1.3%, at $77.24, after hitting its lowest level since December 2021 at $73.60.

Brent crude also briefly turned positive, but settled down 44 cents, or 0.5%, to trade at $83.19 a barrel, after falling more than 3% to $80.61 earlier in the month. the session for its lowest since January 4, 2022.

Both benchmarks posted three consecutive weekly declines.

“Rumor has it that OPEC+ is already starting to float the idea of ​​a production cut on Sunday,” said Matt Smith, senior oil analyst at Kpler. “It helped reverse the losses caused overnight by the Chinese protests.”

Eurasia Group analysts suggested in a note on Monday that weaker demand from China could prompt the Organization of the Petroleum Exporting Countries and its allies, including Russia, to cut production after cutting oil. offer in October.

“The decision will depend on the trajectory of the price of oil when OPEC+ meets and the extent of the disruption evident in markets due to EU sanctions,” the group wrote in its note.

OPEC+ will meet on December 4. In October, OPEC+ agreed to cut its production target by 2 million barrels per day through 2023.

Rumors of a possible cut trumped an earlier sell-off based on China’s weak outlook, where hundreds of protesters and police clashed on Sunday over tough COVID restrictions that limited free time among millions of inhabitants.

China has stuck to President Xi Jinping’s zero COVID policy even as much of the world has lifted most restrictions.

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Speculative buyers also helped reverse early losses, said Robert Yawger, director of energy futures at Mizuho in New York.

“Almost every time we have a drop of several percentage points, you’ll see the specs come in the afternoon and buy the drop,” he said.

Diplomats from the Group of Seven (G7) and the European Union have discussed capping Russian oil prices at between $65 and $70 a barrel, in a bid to limit revenue to fund Moscow’s military offensive in Ukraine without disrupting global oil markets, and will meet again On Monday.

However, EU governments were divided on the level at which to cap Russian oil prices, with the impact potentially muted.

The price cap is expected to come into effect on December 5, when an EU ban on Russian crude will also come into effect.

Reporting by Nia Williams; Additional reporting by Noah Browning in London, Yuka Obayashi in Tokyo and Mohi Narayan in New Delhi; Editing by Marguerita Choy, Chris Reese and Cynthia Osterman

Our standards: The Thomson Reuters Trust Principles.

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