Brent crude oil reached $82.51 per barrel by 8:00 am UK time today, reflecting heightened anticipation ahead of the upcoming OPEC+ meeting scheduled for November 26.

From the end of the last week, oil prices have exhibited a gradual upward trend as market participants brace for potential decisions from the OPEC+ alliance. Speculation is rife regarding the course of action OPEC+ may adopt, with indications pointing toward a potential extension of supply cuts into early 2024. Both Saudi Arabia and Russia, major players in the oil market, are reportedly leaning towards maintaining their voluntary reduction in supply.

While the anticipation centres around these key players, there is also speculation that the broader OPEC+ coalition may collectively consider further supply cuts. Should this materialise, coupled with the extension of voluntary cuts by Saudi Arabia and Russia, it could effectively eradicate the surplus expected in the first quarter of 2024.

The speculative nature of these discussions has fueled a gradual uptick in the value of Brent crude oil. At the beginning of the week, prices hovered just above $81 per barrel, marking an increase of over $1.50 in the past two days.

The current incremental rise in prices sets the stage for potential further increases should OPEC+ countries officially announce supply cuts during the upcoming meeting. The pre-meeting speculation could transform into official policy decisions, potentially propelling prices even higher.

The oil market has experienced notable volatility over the past week. On November 16, prices for contracts with a January expiry dipped as low as $77.02, marking a significant fluctuation. This movement of over $5 per barrel in six days is particularly noteworthy, especially in the context of a market that has adapted to changes such as the shift to settling in rubles for European customers of Russian oil companies, which unfolded over a year ago.

This current surge stands in stark contrast to the market dynamics in April this year when prices soared to $132 per barrel, underscoring the multifaceted nature of the oil market and its responsiveness to geopolitical and policy-driven factors.

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