Oil prices rose in Asia on Tuesday, three days before an OPEC meeting in which the cartel is expected to maintain high output levels despite a global supply glut.
Analysts say the Organisation of the Petroleum Exporting Countries is likely to focus more on maintaining market share against competitors than on slashing production in order to lift prices.
US benchmark West Texas Intermediate for delivery in January was up 29 cents to $41.94 and Brent crude for January was trading 18 cents higher at 44.79 a barrel at around 0300 GMT.
“Crude oil remained on the soft side as many expect OPEC to be unwaving about its production target when the group gathers this Friday,” said Bernard Aw, market strategist at IG Markets in Singapore.
“Crude prices are likely to stay sideways ahead of the OPEC meeting, where Iran is expected to announce plans to expand output.” Iran is expected to increase its oil exports after crippling western sanctions are lifted under a landmark deal reached with major world powers in July to curb its nuclear programme. The sanctions have restricted Iranian oil shipments and analysts say their return to the market will further add to the crude oversupply. Iran’s deputy foreign minister Abbas Araghchi said last week that his country expected the deal to come into force in early January, when Tehran will have implemented its commitments.
Oil prices have been in retreat from levels above $100 a barrel reached in mid-2014, with the decline accelerating after OPEC’s November 2014 meeting signalled the group would keep output high.
A key measure of China’s manufacturing activity dropped to its weakest level in more than three years in November, data released Tuesday showed, further underlining weaknesses in the world’s top energy consumer.
The official purchasing managers index (PMI), which tracks activity in the crucial factories and workshops sector, fell to 49.6, the government statistics bureau said. It was the fourth consecutive month of decline and the lowest figure since August 2012.
