Oil prices dropped on Friday ahead of an OPEC meeting, which some analysts predict will see an extension of output cuts until the middle of next near. U.S. crude fell more than 4 percent amid new trade tensions and a record-high crude production in the U.S. Nonetheless, crude ended higher for November.
Brent futures settled $1.44 lower at $62.43 a barrel, 1.5 percent lower for the week. Overall, Brent crude had its most substantial monthly rise since April, reaching a 6 percent increase.
West Texas Intermediate (WTI) futures ended at $55.17 or $2.94 lower. WTI ended 4.1 percent lower for the week, after having three increases in a row. Analysts expect that WTI will end 2.3 percent higher for the month, which would be its highest since June.
Overall, trading volumes were down after Thanksgiving.
Both Brent and WTI futures rose in November, likely because of an anticipated trade deal between China and the U.S. But, a trade deal may be less likely. China cautioned the U.S. this week that the country would institute “firm countermeasures” after U.S. lawmakers backed anti-government protesters in Hong Kong.
Meanwhile, Saudi Arabia has been pushing for more stable oil prices, and OPEC’s upcoming meeting occurs just as oil giant Saudi Aramco has its initial public offering (IPO).
Andrew Lipow of Lipow Oil Associates said: “The bottom line is some people are looking for OPEC to cut production, and I don’t think that’s going to happen.” Lipow says if oil cuts only last a short while, the market will likely sell-off.
OPEC says it will reduce supply by 1.2 million barrels a day through March 2020, while U.S. output climbs to record levels. OPEC’s portion of the reduced production is 800,000 BPD. It’s estimated that in November alone, OPEC output fell to 110,000 BPD.
A survey by Reuters showed that 42 analysts and economists predict that Brent futures will average $62.50 per barrel in 2020.