London — Oil prices dipped roughly 1% on Thursday, extending losses from the previous session, after OPEC+ postponed a meeting, triggering speculation that the group may not deepen output cuts next year due to dissenting African members.
Brent futures were down 85 cents, or about 1%, at $81.11 a barrel by 0916 GMT, after falling as much as 4% on Wednesday.
U.S. West Texas Intermediate crude slid 71 cents, also about 1%, to $76.39, after declining as much as 5% in the previous session.
In a surprise move on Wednesday, the Organization of the Petroleum Exporting Countries and allies including Russia delayed to Nov. 30 a ministerial meeting where they were expected to discuss oil output cuts.
Producers – mainly a trio of African countries – were struggling to agree on output levels and hence possible reductions ahead of the meeting originally set for Nov. 26, OPEC+ sources said.
Analysts said that Angola, Congo and Nigeria were seeking to raise their 2024 supply quotas above the provisional levels agreed at the OPEC+ June meeting.
Angola and Congo have been producing below their 2024 production targets, while Nigeria has been able to increase output above target due to the improving security situation in the oil-rich Niger Delta.
“We think Nigeria can be assuaged as the leadership values its longstanding OPEC membership and improving ties with Saudi Arabia,” said Helima Croft, an analyst at RBC Capital Markets.
“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, cautioned 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.”
The questions over OPEC+ supply come as data showed U.S. crude stocks jumped by 8.7 million barrels last week, which was much more than the 1.16 million build analysts had expected.
Meanwhile, about 3% of crude oil production in the Gulf of Mexico was shut in by an underwater pipeline leak, the U.S. Coast Guard said on Wednesday.
On the demand side, there was more bleak news. Although 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.
U.S. trade is expected to be muted on Thursday due to the Thanksgiving public holiday.
*Natalie Grover, Arathy Somasekhar & Andrew Hayley; editing: Muralikumar Anantharaman & Mark Potter – Reuters
