Oil Steadies Ahead of OPEC+ Supply Meeting as Volatility Drops

Oil was little changed as traders watched for clues on OPEC+’s supply plans ahead of a key meeting this Thursday.

(Bloomberg) — Oil was little changed as traders watched for clues on OPEC+’s supply plans ahead of a key meeting this Thursday.

West Texas Intermediate traded near $68 a barrel after ending modestly higher on Monday, and Brent crude closed below $72, as recent lackluster price action sent a gauge of implied volatility to its lowest in about two months. Traders still expect the producer group to further delay restoring some production due to concerns of a glut next year. 

Oil initially rose on Monday on signs of a gradual economic recovery in China, the biggest importer, before paring gains as the dollar strengthened, reducing the appeal of commodities. Futures have been trading in a range of a little more than $6 since mid-October, buffeted by geopolitical developments in the Middle East and Russia and the demand outlook in China.

In the Middle East, Israel said it’s still committed to a ceasefire after carrying out airstrikes in Lebanon in response to Hezbollah’s first attack under the truce. In Syria, meanwhile, a conflict has flared up as rebels attacked key cities.

Elsewhere, colder-than-usual temperatures in Europe at the start of the northern hemisphere winter have led to a flicker of bullishness in diesel, which includes heating oil still commonly used in the region. Speculators cut short positions for the refined product for a fourth consecutive week, the longest such run since February.

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