Oil slips 2% on growing angst over delayed Opec+ meeting

Prices continue to fall after previous session's plunge

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A refinery in Sonangol, Angola. Angola, Congo and Nigeria are seeking to raise their 2024 supply quotas. — AFP

By Reuters

Published: Thu 23 Nov 2023, 7:21 PM

Last updated: Thu 23 Nov 2023, 7:22 PM

Oil prices dipped about 2 per cent on Thursday, extending losses after the postponement of an Opec+ meeting stoked expectations that the group might not deepen output cuts next year.

Brent crude futures were down $1.40, or about 1.7 per cent, at $80.56 a barrel by 1434 GMT after falling as much as 4 per cent on Wednesday.

US West Texas Intermediate crude slid $1.37, also about 1.4 per cent, to $75.73 after dropping as much as 5 per cent in the previous session.

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In a surprise move on Wednesday, the Organisation of the Petroleum Exporting Countries and allies including Russia delayed to Nov. 30 a ministerial meeting at which they were expected to discuss oil output cuts.

Producers were struggling to agree on output levels ahead of the meeting originally set for Nov. 26, Opec+ sources said, suggesting that the disagreement was largely linked to a trio of African nations.

Angola, Congo and Nigeria are seeking to raise their 2024 supply quotas above the provisional levels agreed at the June meeting of the Opec+ producer group.

“We think Nigeria can be assuaged as the leadership values its longstanding Opec membership and improving ties with Saudi Arabia,” said RBC Capital Markets analyst Helima Croft.

“However, it may be more difficult to bridge the gap with Angola, which has been a moodier member of the producer group since it joined in 2007.”

Although internal upheavals have been quelled effectively in the past, this latest episode lays bare the enormity of the task that Opec+ must accomplish, said Tamas Varga of oil broker PVM.

“What is certain is continuous volatility with a plausible price swing to the extent of $10+ after next Thursday’s meeting and possibly even before,” he said.

The questions over Opec+ supply come as data showed that US crude stocks jumped by 8.7 million barrels last week, much more than the 1.16 million build analysts had expected.

On the demand side, there was more bleak news. Though a survey showed the downturn in euro zone business activity eased in November, data suggested the bloc’s economy will contract again this quarter as consumers continue to rein in spending.

US trade is expected to be muted on Thursday because of the Thanksgiving public holiday.

Reuters

Published: Thu 23 Nov 2023, 7:21 PM

Last updated: Thu 23 Nov 2023, 7:22 PM

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