By Adedapo Adesanya
Oil fell nearly 1 per cent on Wednesday after the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) unexpectedly delayed a meeting on production cuts.
OPEC+ postponed the meeting, originally scheduled for November 26 to November 30, according to a statement yesterday, bringing down the price of Brent by 49 cents to $81.96 a barrel as the US West Texas Intermediate (WTI) crude lost 67 cents to finish at $77.10 per barrel.
Russian Deputy Prime Minister, Mr Alexander Novak, and Saudi Energy Minister, Prince Abdulaziz bin Salman, agreed to delay the meeting, citing issues around other producers.
This is a surprise development that drove prices sharply lower in early trading. The group was expected to discuss whether to expand oil output cuts.
Prices bounced back after news that the disagreement was related to African countries, which are among the smaller producers in the group, rather than the top oil exporters.
The OPEC+ meeting, which includes major producers Saudi Arabia, Russia and other allies and members of the Organization of the Petroleum Exporting Countries, had been expected to consider further changes to a deal that already limits supply into 2024, according to analysts and OPEC+ sources.
The delay stoked concerns that more production could come online from oil producers in the coming months.
Even if the OPEC+ nations extend their cuts into next year, the global oil market will see a slight supply surplus in 2024, an official of the International Energy Agency (IEA) said on Tuesday.
Prices were pressured after the US Energy Information Administration (EIA) reported a sizeable inventory build of 8.7 million barrels for the week to November 17.
This compared with an inventory build of 3.6 million barrels for the week to November 10.
It also compared with an estimated inventory build of a substantial 9 million barrels, reported by the American Petroleum Institute (API) for the week to November 17.
Also, the US Dollar index bounced back from a 2½-month low after economic data showed lower unemployment claims. A rise in the greenback makes Dollar-denominated oil more expensive for buyers in other currencies.
Some traders also pointed to low liquidity ahead of the US Thanksgiving holiday on Thursday.
