Oil prices fall as OPEC delays meeting
Oil futures fell on Wednesday after OPEC postponed an upcoming meeting, but recovered throughout the afternoon. West Texas Intermediate (CL=F) futures fell less than 1%, settling above $77 a barrel.
Inรฉs Ferrรฉ of Yahoo Finance reports:
OPEC+, a consortium of the world's largest oil producers led by Saudi Arabia, Announced would delay its next meeting to Nov. 30 from Nov. 26, raising uncertainty about the group's plans for additional production cuts.
"They [OPEC] "We like to reach a consensus before we meet," Ed Hirs, a senior researcher at the University of Houston, told Yahoo Finance on Wednesday morning.
The announced delay could be a sign that member countries are not in sync about their next steps.
"I think this means they're having a hard time getting everyone to accept the notion of more cuts across the board," Stewart Glickman, an energy stock analyst at CFRA Research, told Yahoo Finance on Wednesday of the delay.
Saudi Arabia, which has unilateral reductions instead of one million barrels per day until the end of the year, is supposedly pressing smaller OPEC+ members to participate more in reductions.
This year's cuts have aimed to limit global supply and keep a floor under oil prices, which have fallen by approximately 20% from the average price that prevailed in 2022.
"We see some room for the group to taper deeper, but we would anticipate Saudi Arabia would seek additional barrels from other members to share the burden of tightening," wrote Helima Croft, head of global commodities strategy at RBC Capital. in a note this week.
Market fundamentals may also be contributing to uncertainty among OPEC+ members after a bearish oil market outlook was presented to the group this week. The materials of a major financial trader. reviewed by Reuters The recent November sell-off was sparked by bearish sentiment from oil producers and airlines.
"Increasing the price in the face of weakening demand could further reduce demand, resulting in [in] lower prices anyway," said Hirs of the University of Houston.
