Oil prices down with market focus on OPEC meeting

– OPEC and allies expect to not only maintain but extend production cut up to end of June 2020 at upcoming OPEC meeting

Crude oil prices were down during Friday’s morning trading while global oil markets and investors focus on the much-anticipated OPEC meeting next week.

The international benchmark Brent crude was trading at $63.11 per barrel on Friday at 0636 GMT, a 0.27% decline, after it closed Thursday at $63.28 a barrel with a daily loss of 1.22%.

American benchmark West Texas Intermediate remained unchanged from the previous session at $58.08 a barrel at the same time, having decreased 0.05% on Thursday.

As the oil market struggles with the glut of supply, Saudi Arabia-led OPEC and Russia-led non-OPEC countries will meet on Dec. 5-6 in Austria’s capital Vienna for a ministerial meeting.

The group, known as OPEC+, is expected to maintain their production cuts, which they had lowered by a total of 1.2 million barrels per day (bpd) in December 2018.

The organization and its allies extended the output cut agreement in June until the end of March 2020, and they are now expected to extend this until the end of June next year.

Although OPEC could make deeper production cuts to push oil prices higher, it could result in market share loss to U.S. shale oil producers.

The U.S. became the world’s largest crude oil producer in November 2018, after surpassing Saudi Arabia and Russia. Its current crude output reached a record high level of 12.9 million bpd for the week ending Nov. 22.

To protect its market share against the U.S., OPEC is expected to push for compliance of its members and Russia in their current oil production quotas.

However, this could prove difficult for Moscow in the winter season, since Russia needs natural gas output from oil wells, some of which it cannot shut down because of the possibility of the wells and pipelines freezing and causing infrastructure damage.

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