Oil prices fell on Friday, with the Brent Feb-25 contract settling 3.7% lower for the week. However, prices are still trading in a narrow range due to ongoing uncertainty about supply.
The Organisation of the Petroleum Exporting Countries (OPEC+) is set to meet on December 5 to discuss its output policy for 2025. The meeting was originally scheduled for November 1 but has been postponed. OPEC+ members will consider increasing production to support the market, but this could lead to a surplus.
The group’s decision is complicated by some members failing to adhere to their agreed production levels. Additionally, Russia’s announcement to allow producers to export gasoline from January has raised concerns about market stability.
In other news, European gas prices surged on Friday due to tighter-than-expected storage levels and concerns over Russian piped gas supplies via Ukraine coming to an end. This has led to backwardation between summer 2025 and winter 2025/26 heating season values.
Metal prices also saw significant gains, with iron ore rising 8% in the past two weeks as higher profitability at Chinese steel mills supported demand. Copper production in Chile increased 6.7% year-over-year in October, while aluminium stocks fell for a fifth consecutive week.
The European Commission has revised its grain production estimates, predicting a rise to 256.9mt for the 2024/25 season. However, this increase is expected to be limited due to lower output and exports compared to previous seasons.
Source: https://think.ing.com/articles/the-commodities-feeds-opec-week021224