LONDON: Oil prices were little changed on Wednesday, after falling by more than 3% to six-month lows in the previous session on oversupply and demand concerns.
Brent crude futures for February were up 6 cents, or 0.08%, to $73.30 a barrel at 1142 GMT. U.S. West Texas Intermediate crude futures for January gained 10 cents, or 0.15%, to $68.71 a barrel.
Brent futures closed at their lowest since late June on Tuesday at $73.24 a barrel, incurring a $2.79 a barrel day-on-day loss.
“Concerns around the global economy next year, a weak commitment to output cuts from OPEC+ and higher output elsewhere, including record levels in the US, is weighing heavily on prices into year-end,” said OANDA analyst Craig Erlam.
Investors will be looking ahead to the U.S. Federal Reserve’s meeting later on Wednesday, where interest rates are largely expected to be held unchanged for a third straight round.
India bought Russian oil at $84.2/bbl in October, highest since December
Markets have priced in “aggressive rate cuts” for 2024, said Yeap Jun Rong, market strategist at IG. “Any disappointment on that front could strengthen the U.S. dollar and weigh on the risk environment,” pushing down oil prices, Yeap said.
Holding rates at high levels could be “a real barrier to long-term buying in oil, being made so much more relevant by a contango market that should attract storage buy strategies,” PVM’s Evans added, referring to the current market structure where futures contracts are trading above spot prices.
Elsewhere on Wednesday, nearly 200 nations reached an historic deal at the COP28 conference to begin reducing the global consumption of fossil fuels, meant to send a signal to investors in oil and other fossil fuels.
Saudi Arabia’s energy minister said he was in agreement with the COP28 presidency on the final deal, adding that it would not affect the kingdom’s hydrocarbon exports.
The United Nations on Wednesday passed a resolution calling for a ceasefire in Gaza, with U.S. President Joe Biden warning that Israel was starting to lose international support because of civilian deaths.