Oil prices held steady on Wednesday as traders awaited an expected OPEC+ decision to extend supply cuts, while geopolitical tensions remained a key factor shaping market sentiment.
Brent crude futures were up 19 cents, or 0.26%, at $73.81 per barrel, while U.S. West Texas Intermediate crude futures increased 13 cents, or 0.19%, to $70.07.
On Tuesday, Brent posted its largest gain in two weeks, rising 2.5%, according to Reuters.
A fragile ceasefire between Israel and Hezbollah, South Korea’s limited declaration of martial law, and a rebel offensive in Syria threatening to involve forces from several oil-producing countries all provided support to oil prices, according to Priyanka Sachdeva, senior market analyst at Phillip Nova.
However, the bullish momentum has struggled to break through the $75 resistance level, suggesting that market sensitivity to geopolitical and economic developments may be easing, according to Dilin Wu, research strategist at Pepperstone.
“With OPEC+ widely expected to extend its 2.2 million barrels per day voluntary production cut into the first quarter of 2025, prices are likely to stay range-bound unless a new catalyst emerges,” Wu said.
Industry sources said that the OPEC and its allies, known as OPEC+, are likely to extend output cuts until the end of the first quarter of next year when they meet on Thursday.
OPEC+ has been aiming to gradually phase out supply cuts throughout next year.
“Neither geopolitics and OPEC+ action nor sanguine financial data will alter the underlying fundamental outlook. Protracted attempts to push oil towards $80 a barrel will be reined in by supply checks and loose oil balances,” said PVM oil analyst Tamas Varga.
U.S. crude oil inventories increased by 1.2 million barrels last week, according to market sources citing data from the American Petroleum Institute.
