Oil Is Little Changed As Traders Stand Pat Until OPEC+ Meeting

(Bloomberg) -- Oil was little changed as traders wait to see whether OPEC and its allies will intervene in the market at their upcoming meeting. 

West Texas Intermediate settled near $78 a barrel on Tuesday after holding steady in a $1 range. Crude climbed more than 6% in the prior two sessions on speculation that Saudi Arabia and its allies may deepen supply cuts at their next meeting on Nov. 26. US oil options pointed to many traders increasing bets on that outcome in a bid to reverse a recent slide in prices. 

Crude slipped after President Joe Biden said that a deal to free some Israeli hostages held by militant group Hamas is imminent. Later on, oil regained some ground on news that Federal Reserve policymakers are united around a strategy to “proceed carefully” on future interest-rate moves. 

Between now and the weekend meeting, traders will get fresh insights into US 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 US holiday that is likely to curtail trading activity in the second half of the week. 

An expected buildup in US 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.”

Read More: Oil Traders Struggle as Decades-Old Signal of US Market Weakens

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 US 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.

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