Oil markets were tepid on Monday as traders were reluctant to take on big new positions ahead of an OPEC meeting at the end of the month, when the producer club is expected to decide whether to continue output cuts aimed at propping up prices.
Brent crude futures, the international benchmark for oil prices, were at $62.47 per barrel at 0752 GMT, down 25 cents, or 0.4 per cent, from their last close. US West Texas Intermediate (WTI) crude futures were at $56.57 a barrel, up just 2 cents from their last settlement.
Traders said they were avoiding taking on large new positions due to uncertainty in markets.
“Traders seem to be turning their attention now to the OPEC/Non-OPEC meeting ... and an extension of the production cut deal to cover all of 2018,” said Jeffrey Halley of futures brokerage OANDA.
OPEC-non-OPEC meeting
The Organization of the Petroleum Exporting Countries (OPEC), together with a group of non-OPEC producers led by Russia, has been restraining output since the start of this year in a bid to end a global supply overhang and prop up prices.
The deal to curb output is due to expire in March 2018, but OPEC will meet on Nov. 30 to discuss the outlook for the policy.
OPEC is expected to agree an extension of the cut as storage levels remain high despite recent drawdowns, although there are doubts about the willingness of some participants to continue to restrain output.
“(The) OPEC meeting remains the key sector catalyst into year-end ... The market expectation is for an extension through 2018, created by OPEC comments early this fall ... (but) there is increased risk that OPEC delays the extension decision,” US bank Morgan Stanley said on Monday in a note to clients.
Morgan Stanley said that the question over extended cuts "has shifted to non-OPEC participants' willingness to extend, primarily Russia".
Despite this, Greg McKenna of futures brokerage AxiTrader said it was “worth noting data showed more longs added by the speculative community", indicating expectations of rising prices.
In the United States, the number of rigs drilling for new oil production remained unchanged in the week to November 17, at 738, data from oil services firm Baker Hughes showed on Friday.