Oil prices were little changed on Thursday as weaker-than-expected Chinese factory data highlighted slowing growth in the world’s second-largest economy, as investors remained cautious ahead of a meeting where the OPEC+ group is expected to decide on production cuts.
Brent crude futures were down 15 cents, or 0.2%, at $82.95 a barrel as of 04:45 GMT, while West Texas Intermediate (WTI) crude futures rose up 12 cents, or 0.2%, at $77.98 a barrel.
In the previous session, oil markets found support in hopes of some kind of price-supporting decision from the OPEC+ group, which includes the Organization of Petroleum Exporting Countries and allies including Russia.
OPEC+ members are expected to hold a policy meeting today. According to information provided by sources close to the group, additional production cuts were discussed in the discussions before the meeting, but the details have not yet been decided.
There’s a larger-than-expected increase in crude oil inventories, according to EIA data, and there’s a downside surprise in China’s PMI figures this morning. While both were expected to support a narrower supply-demand gap, they did not cause much of a decline in prices.
China’s manufacturing activity contracted for the second consecutive month in November and faster than expected, an official factory survey showed on Thursday. This has highlighted the need for further policy support measures to help support economic growth in the world’s largest oil importer.
The official purchasing managers’ index (PMI) fell to 49.4 in November from 49.5 in October, remaining below the 50-point level that limits contraction from expansion. Analysts were expecting a reading of 49.7.
Meanwhile, the U.S. Energy Information Administration (EIA) reported Wednesday that there was a surprise increase in U.S. crude oil and distillate fuel stockpiles last week; This indicates a weakening in demand. Data showed that gasoline stocks also increased more than expected.
For now, the market has ignored the relatively bearish oil stock report from the EIA and all eyes are on the OPEC+ meeting.
Another uncertainty on the meeting’s agenda is that it is still unclear whether the group has been able to resolve the dispute over Angola and Nigeria’s production targets for next year. Angola and Nigeria, African members of the OPEC+ producer group, are aiming for higher oil production.