Oil prices drop on US stock build, delay in OPEC+ meeting
By Administrator_ India
Oil prices extended losses on Wednesday, hit by a surprise build in oil inventories in the United States and as OPEC and its allies left markets in limbo by delaying a formal meeting to decide whether to increase output in January.
Brent crude oil futures were down by 27 cents, or 0.6%, at $47.15 a barrel by 0131 GMT, while West Texas Intermediate crude was down by 29 cents, or 0.7%, at $44.26.
Industry data from the American Petroleum Institute showed U.S. crude inventories rose by 4.1 million barrels last week, compared with analysts’ expectations in a Reuters poll for a draw of 2.4 million barrels.
The numbers came after the OPEC, Russia and other allies, a group known as OPEC+, postponed talks on next year’s oil output policy to Thursday from Tuesday, sources said.
Earlier this year the group imposed production cuts of 7.7 million bpd as the coronavirus pandemic cut into fuel demand. It had been widely expected to roll those reductions over into January-March 2021 amid spikes in COVID-19 cases.
“A resurgent virus has seen restrictions on travel increase across Europe and the U.S,” they said, adding the market surplus could be as high as 1.5 to 3 million barrels per day in the first half of next year, if the group does not extend cuts.
But the UAE said this week that even though it could support a rollover, it would struggle to continue with the same deep output reductions into 2021.Meanwhile non-OPEC+ member Norway’s oil output curbs, in place since June, are set to end on Dec. 31, which could further dent prices.