Oil prices fell in early Monday trading as Brent crude dropped below $80 a barrel. The price dip is attributed to investors awaiting the upcoming meeting of the OPEC+ group to agree on the size of production cuts in 2022.
Price action
At 0455 GMT, Brent crude futures dropped 80 cents to $79.78 per barrel, while West Texas Intermediate crude futures fell 83 cents to $74.71 per barrel.
Crude oil prices saw a slight increase last week, marking the first gain in five weeks. This was largely due to the anticipation of Saudi Arabia and Russia extending supply cuts until 2024. Additionally, OPEC+ is expected to discuss plans for further cuts in the near future.
Last week, the prices of oil saw a decline. This happened after OPEC and its allies, which include Russia, also known as OPEC+, decided to push back their ministerial meeting until November 30. They did this in order to resolve issues related to production targets for African producers. This information was reported by Reuters.
ING analysts stated that despite expectations of Saudi Arabia continuing voluntary production cuts, market sentiment remains negative due to the OPEC+ dispute over production quotas.
The International Energy Agency predicts a slight increase in global oil supply by 2024 despite OPEC+ production cuts until next year.
After a truce agreement in Gaza and the exchange of Palestinian hostages and prisoners, oil prices stabilized with the receding of geopolitical tensions in the Middle East.
