Oil prices fell nearly 1% in a volatile session on Wednesday as OPEC+ producers unexpectedly delayed a meeting on production cuts, raising questions about global crude supplies.
Brent futures closed down 49 cents at $81.96 a barrel, after falling more than 4% to a low of $78.41 earlier in the session. US West Texas Intermediate crude oil closed down 67 cents at $77.10, after falling more than 5% to a session low of $73.79 earlier in the day.
OPEC+ postponed The meeting, originally scheduled for November 26 to November 30, said in a statement, a surprise development that lowered prices considerably in early trading. The group was expected to discuss whether to extend oil production cuts.
Prices recovered after news that the disagreement was linked to African countries, which are among the group’s smallest producers, rather than major oil exporters.
Some traders also pointed to low liquidity ahead of the Thanksgiving holiday.
The OPEC+ meeting, which includes top producers Saudi Arabia, Russia and other allies and members of the Organization of the Petroleum Exporting Countries, was expected to consider new changes to an agreement that already limits supply until 2024, according to analysts and OPEC+ sources.
The delay fueled concerns that there could be more production from oil producers in the coming months, said Dennis Kissler, senior vice president of operations at BOK Financial.
An increase in inventories also put downward pressure on prices Wednesday morning, he said.
U.S. crude oil inventories rose by 8.7 million barrels last week due to higher imports, the Energy Information Administration said.
The Brent and WTI oil benchmarks have fallen for four consecutive weeks.
To support prices, OPEC and its allies will need to not only extend but increase cuts, John Evans of oil broker PVM said in a note.
Earlier this week, an OPEC technical panel invited a major financial market trader to make a presentation, seen by Reuters, that painted a bearish outlook for the oil market.
Even if OPEC+ nations extend their cuts into next year, the global oil market will see a slight supply surplus in 2024, the head of the International Energy Agency’s oil markets and industry division said on Tuesday.
