Oil prices were little changed on Thursday as uncertainty ahead of a planned OPEC-led crude production cut and thin liquidity due to the US Thanksgiving holiday kept traders from making big new bets on markets.
International Brent crude oil futures were trading at USD 49.00 at 0403 GMT, up 5 cents from their last close.
US West Texas Intermediate (WTI) crude futures were at USD 48.04 per barrel, up 8 cents from their last settlement.
Traders said market activity was low due to the US holiday, and there was a reluctance to take on big price directional bets due to uncertainty about a planned oil production cut, led by the Organization of the Petroleum Exporting Countries (OPEC).
OPEC is due to meet on Nov. 30 to coordinate a cut, potentially together with non-OPEC member Russia, but there is also disagreement within the producer cartel as to which member states should cut and by how much.
“The Thanksgiving Holiday today has thinned traders interest … but the OPEC result next Wednesday is the only game in town for energy traders,” said Jeffrey Halley, senior market analyst at OANDA brokerages in Singapore.
Most analysts believe some form of production cut will be agreed, but it is uncertain whether it will be enough to prop up a market that has been dogged by a fuel supply overhang for over two years, resulting in a record three years of falling investments into the sector, according to the International Energy Agency (IEA).
“We expect OPEC will reach an agreement at next week’s biannual meeting in Vienna… If OPEC does successfully reach an agreement, prices are likely to test the year high in Brent of USD 53 per barrel,” ANZ bank said in a note to clients on Thursday.
But it added that “investor positioning data and price action suggest the market remains unconvinced,” and that net long positions, which would profit from rising prices, were still at lows not seen since oil hit USD 27 per barrel earlier this year.
Beyond OPEC, traders said the strong US-dollar, which is at levels last seen in 2003 against a basket of other leading currencies, was influencing oil prices.
A strong dollar, in which oil is traded, makes fuel purchases more expensive for countries using other currencies at home, potentially crimping demand.
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