The Brent futures contract has been hovering around the $75.75/bbl handles throughout the day and at $75.73/bbl at 17:00 GMT (time of writing).
Today, oil prices saw minor price action amid a wait-and-see market as the Fed is about to announce its last monetary policy of the year, with market expectations being that the American Central Bank will likely hold target rates steady at 5.50%. As the Fed also publishes inflationary data, it will be crucial to gauge how much high-interest rates have impacted inflation, a direct factor for oil demand. The decision and data are expected at 19:00 GMT.
Occidental Petroleum will buy CrownRock, a Permian oil and gas producer. The acquisition will be settled in cash and stock for an overall value of $12bn, including debt. Such an addition to Occidental’s portfolio will allow for a boost in production of Permian oil by around 170mbpd. The transaction plans also on delivering increased free cash flow to clients. The resulting increase in cash flow is in line with the company’s intention to raise its quarterly common stock dividend from $0.18 to $0.22. This is the third major acquisition in the US oil industry after Exxon’s acquisition of Pioneer Natural Resources for $59.5bn and Chevron’s acquisition of Hess Corporation for $60bn.
According to sources close to the matter, the COP28 could, for the first time, include a deal to cut the use of fossil fuel. The draft was put forward by the COP28 president and CEO of ADNOC Al Jaber and includes statements like “phasing out of inefficient fossil fuel subsidies” or “accelerating zero and low emissions technologies”.
The front and 6-month Brent futures spreads are at -$0.19/bbl and -$0.09/bbl respectively.
