Oil prices declined in the previous session after the release of some hostages in Gaza reduced the geopolitical risk premium, but prices notched their first week of gains in over a month ahead of next week's output policy decision by the Organisation of Petroleum Exporting Countries and it allies (OPEC+)

Brent crude futures settled down 84 cents, or 1 per cent, at $80.58 a barrel, while US West Texas Intermediate crude fell $1.56, or 2 per cent, from Wednesday's close to $75.54, according to news agency Reuters.

India's crude oil output up 1.3% to 2.5 MMT in October, imports rise after four months of declines: PPAC

Both contracts had their first weekly gain in five weeks as OPEC+ prepares for its meeting that will have output cuts high on the agenda after recent oil price declined on demand concerns and higher supply, particularly from non-OPEC producers.

Back home, on the Multi Commodity Exchange (MCX), crude oil futures due for a December 18 expiry, settled lower by 0.56 per cent at ₹6,338 per bbl, having swung between ₹6,330 and ₹6,436 per bbl during the session, against a previous close of ₹6,374 per barrel.

What's affecting crude oil prices?

-The first group of hostages freed from captivity in Gaza returned to Israel on Friday, on the first day of a planned four-day truce during which further exchanges of hostages for Palestinian detainees are due to take place.

-The OPEC+ group surprised the market on Wednesday by delaying its November 26 to November 30 after the oil producers struggled to reach a consensus on output levels. 

-Analysts speculate that Saudi Arabia is pressing for extending the supply cuts beyond 2023. The surprise delay had initially brought Brent futures down as much as 4 per cent and WTI by as much as 5 per cent in intraday trading on Wednesday. 

-China's longer-term economic outlook remains subdued. Analysts say oil demand growth could weaken to about 4 per cent in the first half of 2024 as the property sector crunch weighs on diesel use. Fresh aid to China's indebted property sector can be positive for the oil market's near-term trend, according to analysts.

-Non-OPEC production growth is set to remain strong, with Brazilian state energy company Petrobras planning to invest $102 billion over the next five years to boost output to 3.2 million barrels of oil equivalent per day (boepd) by 2028, up from 2.8 million boepd in 2024, according to Reuters.