Oil Prices Outlook

Oil prices slightly dipped in Asian trade on Friday but were poised for a positive weekly performance. This followed OPEC+’s announcement to delay production increases, along with potential disruptions in U.S. supply.

Traders remained optimistic about upcoming fiscal stimulus cues from top oil importer China, and Donald Trump’s 2024 presidential election victory prompted a broad market rally. Ongoing Middle East conflicts contributed to a risk premium in oil prices, as Israel continued its offensive against Hamas and Hezbollah.

Market Prices
By 20:11 ET (01:11 GMT), Brent oil futures for January fell 0.3% to $75.44 a barrel, while West Texas Intermediate crude futures decreased 0.3% to $71.72 a barrel. However, both contracts saw gains of 3% to 4% throughout the week.

OPEC+ Production Plans

The week's primary support for oil markets came from OPEC+'s decision to postpone increasing production plans until December. The cartel has previously reduced production by nearly 6 million barrels per day over the last two years to stabilize prices. This decision will ensure those cuts remain for an extended period.

Hurricane Rafael

Caution regarding Hurricane Rafael additionally lifted oil prices. Several energy operators have evacuated their operations in the Gulf of Mexico in preparation for the storm's arrival in this key oil-producing region.

Anticipated Stimulus in China

Attention is now on China’s National People’s Congress (NPC) meeting, expected to reveal new stimulus measures. The meeting started earlier this week and is scheduled to conclude on Friday. Increased fiscal spending will require NPC approval, which analysts anticipate will exceed 10 trillion yuan ($1.6 trillion). Such measures are expected to bolster economic growth in the world’s largest oil importer.