Crude oil supply movement rose slightly at the opening today as investors remained cautiously awaiting the crucial OPEC+ meeting to decide production levels in addition to supply disruptions in the Black Sea putting pressure on prices.
Brent crude fell three cents to $81.65 a barrel and the U.S. West Texas Intermediate managed to rise 12 cents (0.2%) to $76.53 a barrel.
Both crudes gained about 2% yesterday following the Organization of the Petroleum Exporting Countries and Russia (OPEC+) to extend or fine-tune supply cuts as well as concerns over Kazakhstan's oil production and the weakness of the US dollar.
According to Hiroyuki Kikukawa, President of NS Trading, the Nissan Securities unit believes that investors will be ready to sell positions ahead of the OPEC+ meeting at the time of disruption from Kazakhstan. All eyes are on OPEC+ policy and demand towards the end of 2024.
Still, the WTI market is expected to hover around $76 with a $5 range for a while unless OPEC+ resumes significant supply cuts.
In addition, Warren Patterson and Ewa Manthey, analysts from ING bank said that if OPEC+ fails to reach an initial agreement. There is likely to be a risk of the meeting being postponed and will continue to put pressure on oil prices.
Recently, a devastating storm in the Black Sea region has disrupted the supply of up to 2 million barrels per day for export from Kazakhstan and Russia. Indirectly, it raises concerns about short-term supply shortages.
A report by the Ministry of Energy of Kazakhstan mentions that the country's largest oil-producing region has reduced daily oil supply by 56% since November 27.
Meanwhile, US crude inventories fell by 817,000 last week and many analysts estimate on average that crude inventories fell by about 900,000 barrels in the week since November 24.
