Oil prices slump after OPEC+ postpone weekend's meeting
Investing.com — Oil prices traded sharply lower Wednesday after a group of top producers delayed its meeting to set output policy, creating uncertainty about future supply levels.
By 09:00 ET (14.00 GMT), the U.S. crude futures traded 4.2% lower at $74.53 a barrel, while the Brent contract dropped 4% to $79.12 a barrel.
The crude market had started the week on a firm note following reports that Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, was set to discuss cutting output levels further in their meeting over the weekend.
However, the news that the meeting has been postponed to Nov. 26 has created a great deal of uncertainty over future production levels, with traders seeing the postponement as evidence of disagreement between the principal players.
Saudi Arabia, Russia and other members of OPEC+ have already pledged oil output cuts of about 5 million barrels per day, or about 5% of daily global demand, in a series of steps that started in late 2022.
This figure includes a voluntary reduction by Saudi Arabia of one million barrels per day and a 300,000 barrels a day cut in Russian oil exports, both of which last until the end of 2023.
That said, even if OPEC+ extends the cuts into next year, the global oil market will still see a slight surplus of supply in 2024, said Toril Bosoni, the head of the International Energy Agency's oil markets and industry division on Tuesday.
The oil market had already started the day on the backfoot after data from the American Petroleum Institute suggested that U.S. stockpiles grew over 9 million barrels in the week to Nov. 17, substantially more than expectations for a build of 1.5 million barrels.
If confirmed by official data later in the
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