Oil prices fall as OPEC delays meeting
Oil futures took a dive on Wednesday after OPEC put off an impending meeting but rebounded throughout the afternoon. West Texas Intermediate (CL=F) futures fell less than 1% to settle above $77 a barrel.
Ines Ferre of Yahoo Finance reports:
OPEC+, the world’s largest oil producer group led by Saudi Arabia, declared It will postpone its upcoming meeting from Nov. 26 to Nov. 30, raising uncertainty about the committee’s plans for additional production cuts.
“They are [OPEC] They want to get a consensus before they see each other,” Ed Hirsz, a senior fellow at the University of Houston, told Yahoo Finance on Wednesday morning.
The reported delay may be an indication that member states are not synchronizing their next steps.
“I think what this means is that they’re having a hard time buying into the idea of more cuts for everybody,” Stewart Glickman, energy equity analyst at CFRA Research, told Yahoo Finance on Wednesday about the delay.
Saudi Arabia has unilateral cuts of one million barrels per day until the end of the year. It is said to exert pressure Smaller OPEC+ members should play a larger role in the cuts.
This year’s cuts, which are about 20% below average prices in 2022, are aimed at curbing global supply and keeping a floor under oil prices.
“We see some scope for the group to make deeper cuts, but we expect Saudi Arabia to seek additional barrels from other members to share the burden of adjustment,” wrote Helima Croft, head of global commodities strategy at RBC Capital. On a note this week.
Market fundamentals may also contribute to uncertainty among OPEC+ members after the group was given a bearish oil market outlook this week. Materials from a top financial trader reviewed by Reuters showed the latest sell-off in November was fueled by bearish sentiment in oil producers and airlines.
“Raising prices in the face of falling demand may further reduce demand, as a result [in] Regardless of the low cost,” noted the University of Houston’s Hirsz.