Oil Prices Close Lower Awaiting OPEC+ Decision
U.S. crude oil inventories saw a larger-than-expected decline last week, offering some support to prices.
Crude futures dropped nearly 2% on Wednesday, as investors anticipate that OPEC+ will extend its production cuts this week. A greater-than-expected drop in U.S. oil reserves last week provided some support to prices.
Brent futures fell $1.31, or 1.78%, to $72.31 per barrel, and West Texas Intermediate USOIL futures fell $1.40, or 2%, to $68.54 per barrel. On Tuesday, Brent had gained 2.5%, its biggest increase in two weeks.
OPEC+ and Main Geopolitical Aspects
In the Middle East, Israel stated on Tuesday that it would resume its war with Hezbollah if the truce fails, and that its attacks would target deeper areas in Lebanon, including the state itself.
The Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, are expected to extend their production cuts until the end of the first quarter of next year, sources from the sector told Reuters. OPEC+ has aimed to gradually reduce output through next year.
While a delay in withdrawing production cuts is anticipated, the rhetoric from the meeting is expected to have the greatest influence.
According to the U.S. Energy Information Administration (EIA), U.S. crude reserves fell more than expected last week due to increased refinery activity. Gasoline and distillate stocks rose more than expected during the week.
In South Korea, lawmakers have introduced a bill to impeach President Yoon Suk Yeol after his martial law declaration on Tuesday, which was quickly revoked, triggering a political crisis in the fourth-largest Asian economy.
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