Oil Gains Momentum Ahead of OPEC+ Meeting and Federal Reserve Developments

 

Oil extended its most significant weekly gain as traders awaited a crucial OPEC+ meeting on the supply situation and considered indications that the Federal Reserve (Fed) has finalized its interest rate hikes.

Global benchmark Brent crude surpassed $83 per barrel after rising more than 2% on Tuesday. Prices rose on widespread expectations that the Fed has completed its policy tightening and could cut interest rates next year. The recent weakness of the dollar also added to the support.

This price movement ended the previous holding pattern in oil prices just ahead of the OPEC+ meeting scheduled for Thursday. While the producer group plans to set policy for 2024 during the online meeting, a dispute over output quotas for certain African members remains unresolved.

Despite this positive momentum, the oil price continues to head for a monthly decline due to increased supply from countries outside the Organization of the Petroleum Exporting Countries (OPEC). This situation is intensifying pressure on OPEC and its allies to implement more substantial output cuts. According to the International Energy Agency, the global crude market is projected to return to surplus next year.