Oil Holds Near Highest Since November as OPEC+ Tightens Market

By Bloomberg

Sep 04, 2023

image is BloomburgMedia_S0AAV7T0AFB401_04-09-2023_20-00-11_638293824000000000.jpg

The Petroleos de Venezuela SA (PDVSA) Amuay oil refinery at the Paraguana Refinery Complex in Punto Fijo, Falcon State, Venezuela, on Saturday, Aug. 19, 2023. An ad-hoc board for Venezuela's oil company said it will extend a legal deadline on PDVSA's bonds, echoing an agreement for sovereign debt earlier this week. Photographer: Betty Laura Zapata/Bloomberg

(Bloomberg) -- Oil steadied near its highest level since November in a thin holiday trading session as traders await production updates from OPEC+.

West Texas Intermediate futures were little changed above $85 a barrel. The Brent benchmark settled at $89, with both contracts trading in a narrow daily range.

Options markets have seen flurries of bullish activity in recent weeks, with call volumes on US futures rising Friday to their highest since May.

Crude’s recent rally has been driven by cuts from OPEC+ leaders Saudi Arabia and Russia, which are expected to announce their next steps in coming days.

“We think oil prices could be supported over the near term amid the anticipation of persistent supply tightness,” Bank of China International analysts, including Xiao Fu, wrote in a note. “Saudi Arabia and Russia are expected to extend their voluntary production cuts into October.”

At an industry conference in Singapore, Trafigura Group’s co-head of oil trading, Ben Luckock, said the market may be prone to price spikes.

By Alex Longley