Oil prices fall on China concerns, scepticism on OPEC+ cuts

Oil prices fell in Wednesday Asian morning trading as markets continue to doubt the impact of OPEC+ cuts and take cues from a worsening demand outlook in China.

Brent crude futures fell 8 cents, or 0.1%, to $77.12 a barrel by 0101 GMT. U.S. WTI crude futures were down 13 cents, or 0.2%, at $72.19 a barrel.

Both benchmarks closed at their lowest level since July 6 in the previous session, with WTI seeing four consecutive days of declines.

Voluntary output cuts of about 2.2 million barrels per day (bpd) for the first quarter of 2024 by the Organization of the Petroleum Exporting Countries and allies such as Russia (OPEC+) have failed to support market sentiment, amid scepticism over whether the cuts would be implemented in full.

The cuts include an extension of Saudi and Russian voluntary cuts of 1.3 million bpd.

Comments from Russian deputy prime minister Alexander Novak that OPEC+ was “ready to take additional actions to eliminate speculation and volatility” did not significantly influence market sentiment.
Russian President Vladimir Putin is set to visit key OPEC members Saudi Arabia and the United Arab Emirates on Wednesday for talks that are expected to include oil market cooperation. Bearish sentiment has also been driven by concerns over China’s economic health.

On Tuesday, rating agency Moody’s lowered the outlook on China’s A1 rating to negative from stable, citing “increased risks related to structurally and persistently lower medium-term economic growth and the ongoing downsizing of the property sector”.

China will release preliminary trade data, including crude oil import data, on Thursday.

In the U.S., crude oil and fuel inventories rose in the week to Dec. 1, according to market sources citing American Petroleum Institute figures on Tuesday.

Crude stocks increased by 594,000 barrels, the sources said on condition of anonymity. Gasoline stockpiles gained by 2.8 million barrels, while distillate inventories rose nearly 1.9 million barrels.

U.S. government data on inventories is due on Wednesday.

(Reporting by Andrew Hayley. Editing by Gerry Doyle)