By Paul Carsten
LONDON (Reuters) – Oil prices held steady on Thursday after a surprise rise in U.S. gasoline inventories and the postponement of the OPEC+ production policy meeting to Dec. 5 from Dec. 1. .
Futures were up 8 cents at $72.91 a barrel by 0955 GMT, while U.S. West Texas Intermediate crude futures were up 7 cents at $68.79.
Trading is expected to be light due to the US Thanksgiving holiday on Thursday.
OPEC+, made up of the Organization of the Petroleum Exporting Countries and its allies including Russia, delayed its weekend meeting to avoid a conflict with another event, the producer group said.
The group pumps about half of the world’s oil but has maintained production cuts to support prices during a prolonged period of weak global demand. That has led OPEC+ to repeatedly delay reversing those cuts.
OPEC+ sources have said there will be discussions again on December 5 about another delay in oil production increases due to begin in January.
A further postponement has already been factored into oil prices, said Suvro Sarkar of DBS Bank. “The only question is whether it is a setback of one month, three or even more.”
Depressing prices slightly, U.S. gasoline stocks rose 3.3 million barrels in the week ended Nov. 22, the U.S. Energy Information Administration said on Wednesday, countering expectations for a small drop in fuel stocks before holiday trips. [EIA/S]
Slowing fuel demand growth in major consumers China and the United States has weighed heavily on oil prices this year.
Brent and WTI have lost more than 3% this week.
Further pressure on prices comes from a ceasefire agreement between Israel and Lebanon’s Hezbollah, which began on Wednesday and has eased concerns about potential disruption to Middle East oil supplies.
Market participants are unsure how long the ceasefire will hold as the broader geopolitical backdrop for oil remains murky, ANZ Bank analysts said.
Oil prices are undervalued due to market deficit, say commodities research heads at Goldman Sachs and Morgan Stanley (NYSE:) warned in recent days. They also noted the potential risk to Iranian supplies due to sanctions that could be adopted under US President-elect Donald Trump.