Oil prices traded lower on Monday as the stage is set for an OPEC meeting in Vienna where the extension of crude output cuts is set to be discussed, according to Bloomberg MarketWatch.
On the New York Mercantile Exchange, December West Texas Intermediate crude fell by 46 cents, or 0.8%, to settle at $56.09 a barrel on the futures contract’s expiration day. January WTI crude, the new front-month contract, fell 29 cents, or 0.5%, to finish at $56.42 a barrel.
January Brent crude, the global benchmark, fell 50 cents, or 0.8%, to end trading at $62.22 a barrel on London’s ICE Futures Exchange.
OPEC and other producers including Russia will meet on November 30 to review whether to extend the production curb agreement.
“We’re expecting a potential extension of the deal, that’s the general market consensus, OPEC knows that it needs to continue doing what it’s doing because its targets haven’t been reached,” said Mustafa Ansari, energy economist at development bank Arab Petroleum Investments Corp.
Brent oil prices have rallied in recent months to break above $60 for the first time in more than two years, aided by increased geopolitical tensions in major oil-producing nations including Saudi Arabia, along with expectations of an extension to the cuts.
“Even if they [OPEC] do extend the deal, I don’t see too significant a price rise because the market understands even more than ever before that shale production can respond immediately,” said Ansari.
Back on the New York Mercantile Exchange, December natural gas declined 1.6% to $3.047 per million British thermal units.