Oil inches up, all eyes are on the OPEC+ meeting outcome. On Thursday, there was not much of a shift in oil prices as investors eagerly awaited the conclusion of an anticipated conference between OPEC and other countries, which might result in more severe production cutbacks in 2024.

By 09:35 GMT, Brent oil futures for January had increased by 70 cents, reaching $83.80 per barrel. This was even though the contract was scheduled to expire today, which resulted in lower volumes. At $83.46 per barrel, the more active February contract was up 58 cents from its previous price.

The price of a barrel of West Texas Intermediate oil futures in the United States increased by 55 cents, reaching $78.41. It is anticipated that the OPEC+ group, which consists of the Organization of Petroleum Exporting Countries and allies like Russia, will have virtual discussions on Thursday to examine the possibility of additional production cutbacks that might range between 1 million and 2 million barrels per day (bpd) at the beginning of 2024.

The summit, which is taking place on the same day as world leaders gather in Dubai for the United Nations climate conference, was initially supposed to take place the previous week; however, it was postponed owing to conflicts about production limits for African agricultural producers.

According to Tamas Varga, an oil trader through PVM, implementing more cutbacks will increase prices shortly; however, the impact of these cuts will be “dubious” in the long run.

He said compliance will be a problem, and the global oil balance is probably considerably less tight than OPEC forecasts. He made this statement by referencing the most recent commercial inventory data from the United States and the persistently high interest rates in many major nations, both of which are expected to reduce the oil demand.

On Wednesday, the United States Energy Information Administration (EIA) stated that there was an unexpected increase in crude oil stockpiles in the United States by 1.6 million barrels during the last week. This contrasts with the forecasts made by experts in a Reuters survey, which called for a decrease of 933,000 barrels.

On the other hand, analysts noted that oil prices declined on Wednesdays, and all eyes were focused on the conference between OPEC and other countries.

Further contributing to the pessimism on the demand side are China’s ongoing economic difficulties, exemplified in the most recent factory data issued on Thursday. The data revealed that the manufacturing sector contracted for the second consecutive month in November.