SINGAPORE: Oil was little changed on Thursday as investors remained cautious ahead of expected production cuts by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, and as weaker-than-expected Chinese factory data underscored slowing growth in the world’s second largest economy, according to Reuters.
Brent crude futures fell 15 cents, or 0.2 percent, to $82.95 a barrel by 7:45 a.m. Saudi time, while US West Texas Intermediate crude futures rose 12 cents, or 0.2 percent, at $77.98 a barrel.
Oil markets in the previous session found support from hopes of some form of a price-supportive resolution from the OPEC+ group, which includes Russia.
Members of the alliance are due to hold a policy meeting on Thursday. Talks ahead of the meeting were focusing on additional production cuts, although details were yet to be agreed, sources close to the group told Reuters.
“The countdown to the upcoming OPEC+ meeting is now underway, and that has been the central focus for oil prices, as market participants have been shrugging off any bearish news in the way for now,” said Yeap Jun Rong, market strategist at IG.
“We have a larger-than-expected build-up in crude inventories from the EIA data, along with a downside surprise in China’s PMI figures this morning. Both may support a narrower supply-demand deficit, but failed to cause much dent in prices,” Yeap added.
China’s manufacturing activity contracted for a second straight month in November and at a quicker pace than expected, an official factory survey showed on Thursday, suggesting more policy support measures are needed to help shore up economic growth in the world’s largest oil importer.
The official purchasing managers’ index fell to 49.4 in November from 49.5 in October, staying below the 50-point level demarcating contraction from expansion. Analysts polled by Reuters had expected a reading of 49.7.
Meanwhile, the US Energy Information Administration on Wednesday reported a surprise build in US crude oil and distillate fuel stocks last week, indicating weak demand. Gasoline stocks also rose by more than expected, the data showed.
“The market ignored what was a relatively bearish inventory report from the EIA,” said analysts from ING, adding that all eyes are on the OPEC+ meeting.
“Adding to the uncertainty from the meeting is that it is still not clear if the group has been able to resolve a disagreement over Angolan and Nigerian production targets for next year,” the analysts said.
African members of OPEC+ producer group Angola and Nigeria are aiming for higher oil output, officials had told Reuters.
