Oil prices fluctuate as markets assess OPEC+ cuts

Shafaq News / Oil prices were mixed in Asian trade on Wednesday, after posting four sessions' worth of losses, as markets weighed the effectiveness of OPEC+ cuts on supplies and worries of a worsening demand outlook in China.

Brent crude futures climbed 1 cents to $77.21 a barrel by 0438 GMT. U.S. WTI crude futures were down 4 cents at $72.28 a barrel.

Both benchmarks closed at their lowest level since July 6 in the previous session, with WTI seeing four consecutive days of declines.

The Organization of the Petroleum at a Exporting Countries and allies such as Russia (OPEC+) have agreed on voluntary output cuts of about 2.2 million barrels per day (bpd) for the first quarter of 2024 late last week. Those reductions include an extension of Saudi and Russian voluntary cuts of 1.3 million bpd.

"The only positive news over the last couple of days has been Saudi and Russian officials stating that the OPEC+ cuts could be extended or deepened depending on market situations prevailing" in the first half of 2024, said Suvro Sarkar, energy sector team lead at DBS Bank. "Beyond this ... we do not see any positive catalysts for oil price in the near term."

Worries about a spillover effect from the Israel-Hamas conflict on supplies provide some respite to earlier price declines, analysts say.

"Additionally, fears of a potential escalation in the Israel-Hamas conflict came back into play after the U.S. held Iran responsible for an attack on U.S. vessels," said Phillip Nova's senior market analyst, Priyanka Sachdeva.

However, some analysts remained bearish on price movements.

(Reuters)