By Adedapo Adesanya
Major crude oil futures performed poorly on Thursday as some oil producers appear not to buy the idea of extending the current production restrictions for another period.
This is coming mainly from the Organisation of the Petroleum Exporting Countries (OPEC), the main group which cut supply to the market.
The deputy leader of Iraq had criticised the cartel, saying the economic and political conditions of member countries should be considered before they are asked to withhold production.
As a result of the crack in OPEC, the price of the Brent crude lost 81 cents or 1.67 per cent on Thursday to sell at $47.80 per barrel while the West Texas Intermediate (WTI) crude slid by $1.18 or 2.63 per cent to trade at $44.99 per barrel.
The price of crude oil had risen this week to its highest levels since March, hitting $49 per barrel due to the huge process made in the development of vaccines for coronavirus, which could cause a swift recovery in energy demand next year. The vaccine news has also resulted in the 25 per cent growth posted by the commodity in the month of November.
Meanwhile, OPEC’s president, Mr Abdelmadjid Attar, who is also Algeria’s Minister of Energy, has warned members of the group to remain cautious, with necessary indications pointing to the risk of a new oil surplus early next year.
While an extension of existing cuts is expected, the recent oil rally gives leverage to members reluctant to go along, including Iraq, Nigeria, and the United Arab Emirates (UAE), who are largely oil-dependent.
However, despite this, market analysts are wary as there are indications that European demand is weak even as Asian consumption improved.
Europe’s largest economy, Germany extended a partial lockdown to curb the spread of coronavirus for at least three more weeks and news from Norway indicates that another strike was imminent.
It was gathered that if the issues raised by the workers in the oil and gas sector of the country is not resolved by the weekend, two of the country’s fields may have to stop flows and cause prices of oil to spike again.
