Investing.com -- Oil prices settled lower Monday as traders looked ahead to a virtual OPEC+ meeting this week that will set the trajectory of oil output into next year.
By 14:30 ET (19:30 GMT), the U.S. crude futures traded 0.9% lower at $74.86 barrel and the Brent contract dropped 0.7% to $79.94 a barrel.
Postponed OPEC+ meeting looms
The crude benchmarks recorded their first positive week in five last week, but the tone turned negative after the Organization of the Petroleum Exporting Countries and allies, including Russia, a group known as OPEC+, delayed its gathering to discuss output levels going into 2024.
The group are now scheduled to meet on Thursday, and remotely rather than in person in Vienna, instead of Sunday as originally planned, reportedly after Angola and Nigeria expressed unhappiness over their lower 2024 production targets.
The group has reportedly moved closer to a compromise, after the postponement late last week, but uncertainty still reigns.
OPEC+, led by Saudi Arabia and Russia, agreed to substantially curb supply this year, amid growing fears that high interest rates and worsening economic conditions will dent global oil demand.
“Expectations are that Saudi Arabia will at least roll over its additional voluntary cut of 1MMbbls/d into next year. Clearly, if we do not see this, it would put further downward pressure on the market, given the surplus over 1Q24,” said analysts at ING, in a note.
“We believe that the Saudis will roll over this cut and there is a growing possibility that we see a deeper cut from the broader group. In doing this, the group would provide good support to the market going into 2024.”
U.S. stockpiles in focus
Investors will also be keeping an eye on the latest U.S. inventories data, after the official EIA numbers showed a substantially bigger-than-expected increase last week, with U.S. production remaining close to record highs.
This was the fourth straight week of builds for U.S. inventories, with U.S. production remaining close to record highs.
Economic data deluge
Oil markets were also cautious before a string of major economic readings this week, starting with eurozone inflation on Thursday. The bloc slipped into a technical recession in the third quarter, ramping up concerns over slowing crude demand.
Chinese purchasing managers index data is due on Thursday, and is set to offer more cues on business activity in the world’s largest oil importer. Economic activity in the country has remained largely languid in recent months which, coupled with surging oil inventories, could spur a slowdown in Chinese oil demand.
A second reading on U.S. gross domestic product data for the third quarter is also on tap this week, as is a reading on PCE prices - the Federal Reserve’s preferred inflation gauge. Both readings are expected to show continued resilience in the U.S. economy.
(Peter Nurse and Ambar Warrick contributed to this article.)