By Robert Harvey
LONDON (Reuters) -Oil prices edged up on Wednesday, but remained near the six-month lows reached in the previous session after a more than 3% drop, with investors concerned about oversupply and waning demand.
Brent crude futures for February were up 30 cents, or 0.41%, at $73.54 a barrel at 1256 GMT. U.S. West Texas Intermediate crude futures for January gained 32 cents, or 0.47%, to $68.93 a barrel.
Brent futures closed at their lowest since late June on Tuesday at $73.24 a barrel, incurring a $2.79 a barrel day-on-day loss.
“Concerns around the global economy next year, a weak commitment to output cuts from OPEC+ and higher output elsewhere, including record levels in the United States, is weighing heavily on prices into year-end,” said OANDA analyst Craig Erlam.
In its latest monthly oil market report, OPEC blamed the latest crude price slide on “exaggerated concerns” about oil demand growth.
The group of oil producing nations kept its forecast for world oil demand growth unchanged for 2024 at 2.25 million barrels per day (bpd).
Investors will be looking ahead to the U.S. Federal Reserve’s policy decision later on Wednesday, where interest rates are largely expected to be left unchanged for a third time in a row.
Markets have priced in “aggressive rate cuts” for 2024, said Yeap Jun Rong, market strategist at IG. “Any disappointment on that front could strengthen the U.S. dollar and weigh on the risk environment,” pushing down oil prices, Yeap said.
Elsewhere on Wednesday, nearly 200 nations reached an historic deal at the COP28 conference to begin reducing the global consumption of fossil fuels, meant to send a signal to investors in oil and other fossil fuels.
Saudi Arabia’s energy minister said he was in agreement with the COP28 presidency on the final deal, adding that it would not affect the Kingdom’s hydrocarbon exports.
Israel said it will continue its war in Gaza whether or not it has international backing, after the United Nations passed a resolution calling for a ceasefire and U.S. President Joe Biden warned that Israel was starting to lose support because of civilian deaths.
(Reporting by Robert Harvey in London and Colleen Howe in Beijing; Editing by Mark Potter, Kirsten Donovan)
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