By Adedapo Adesanya
Oil dipped on Thursday, extending losses on expectations that the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) might not deepen output cuts next year after the producer group postponed its policy meeting.
Brent crude futures were down 68 cents or 0.8 per cent to quote at $81.28 a barrel, and the US West Texas Intermediate (WTI) crude futures slid by 75 cents or 1 per cent to settle at $76.35 per barrel.
Trading activity was muted because of the US Thanksgiving public holiday, but the preceding development was able to tell on the market.
On Wednesday, OPEC+ delayed a ministerial meeting at which they were expected to discuss oil output cuts to November 30.
Although no official reason was given, it was widely speculated that it is because producers were struggling to agree on output levels ahead of the meeting originally set for November 26, OPEC+ sources said, suggesting that the disagreement was largely linked to African nations.
Reuters reported that top African members of the OPEC+ producer group, primarily Nigeria and Angola are aiming for higher oil output.
Nigeria was producing 1.7 million barrels per day of crude and condensates as of November 17 and expects to hit 1.8 million barrels per day by the end of the year.
Nigeria’s governor to OPEC, Mr Gabriel Tanimu Aduda on Thursday said he was not aware of any disagreements with other members of OPEC+ about the country’s production targets.
“We are not aware of any disagreements, it is more a matter of seeking alignments,” Mr Aduda said.
As for Angola, it is pumping less than its quota for 2024, according to separate OPEC figures.
This move could help Saudi Arabia, Russia and other OPEC+ members which have already pledged oil output cuts of about 5 million barrels per day (bpd), or about 5 per cent of daily global demand, in a series of steps that started in late 2022.
This figure includes a 1 million barrels per day voluntary reduction by Saudi Arabia and a 300,000 barrels per day cut in Russian oil exports, both of which last until the end of 2023.
Analysts said they did not expect any surprises from the OPEC meeting, with Saudi Arabia most likely to extend its voluntary cuts of 1 million bpd for another month while the rest of OPEC would probably stick to their current quotas.
Fears that OPEC+ will further deepen cuts at its next meeting put downward pressure on oil prices earlier this week, but the postponement of the meeting has added further concerns over the intensifying spat among the cartel’s members.
Ahead of the delayed meeting, most analysts had expected the Saudis to extend the voluntary production cuts into 2024.
Dipo Olowookere