WTI and Brent crude oil prices experienced a decline following heightened anticipation created by OPEC+'s decision to postpone their meeting on production cuts due to disagreements with certain African nations. Eventually, the announcement disclosed voluntary production cuts by selected members, notably led by Saudi Arabia, totaling approximately 2.2 million bpd. The failure to achieve a unanimous agreement has raised doubts about the organization's effectiveness and cohesion. Subsequently, the alliance revealed that Brazil, the largest producer in South America, will join OPEC in January 2024, although no additional details were provided.
The decision by OPEC, influenced by forecasts of a potential surplus in 2024, led to the implementation of new extended cuts, aiming to significantly alleviate this excess.
From a USD perspective, this week is relatively light yet hard hitting in terms of data releases. Firstly, the ISM services PMI report is expected to tick higher – a print that is key to the US economy being primarily services driven. Closing it out, the Non-Farm Payroll (NFP) report later in the week will provide insights into the state of the US job market. Considering the greenback is currently trading at multi-month lows, the potential for some dollar strength could exert downward pressure on crude oil.
Economic Calendar (GMT+08:00)
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