Oil declined after two days of gains as traders tempered expectations that OPEC+ will intervene in the market to bolster prices, with healthy supplies and ebbing geopolitical risks also adding to the retreat.

West Texas Intermediate eased less than one per cent to near US$77 a barrel after U.S. President Joe Biden said that a deal to free some Israeli hostages held by militant group Hamas is imminent. Oil rose more than six per cent in the prior two sessions on speculation that Saudi Arabia and its allies may deepen supply cuts at their next meeting on Nov. 26. U.S. oil options point to many traders increasing bets on this outcome in a bid to reverse a recent slide in prices.

Between now and the weekend meeting, traders will get fresh insights into U.S. fundamentals with the release of official figures on crude and product stockpiles. Nationwide crude inventories have expanded for the past four weeks to the highest since August. There’s also a U.S. holiday that is likely to curtail trading activity in the second half of the week.

An expected buildup in U.S. stockpiles, as well as the contango structure of WTI’s front-month spread, “are keeping a lid on prices,” said Dennis Kissler, senior vice president for trading at BOK Financial Securities. “But its mostly a choppy trade until we see what OPEC+ is going to do.”

Indications that non-OPEC crude supplies are expanding have buffeted prices in recent weeks, with the gains in production offsetting the impact of collective and voluntary reductions agreed by the Organization of Petroleum Exporting Countries and its allies, including Russia. Crude exports from the latter fell to a three month-low ahead of the meeting.

In the Middle East, Iran-backed Houthi rebels seized an Israeli-owned ship in the Red Sea in retaliation for the war in Gaza, raising fears over potential disruption in one of the world’s busiest shipping conduits. Still, the market was more reactive to Hamas — designated a terrorist organization by the U.S. and European Union — saying it was close to reaching a “truce agreement” in talks with Qatar and Israel, a sign that hostage negotiations are progressing.


  • WTI for January delivery eased 0.7 per cent to $77.28 a barrel at 12:03 p.m. in New York.
  • Brent for January settlement fell 0.6 per cent to $81.84 a barrel.