• Friday, February 23, 2024
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BusinessDay

Oil prices decline 4% as OPEC+ postpones meeting

Nigeria’s oil rig falls first time in 8 months as production dips

Crude oil prices dropped by 4 percent in the global market on Wednesday after the Organization of Petroleum Exporting Countries and allies confirmed that its meeting scheduled for this weekend would be postponed to November 30.

Brent Crude, the international benchmark, dived below the $80 a barrel threshold, at $79.12, down by 4.26 percent, while the US benchmark, WTI Crude, crumbled by 4.37 percent to below $75 a barrel, to $74.55 on the day.

This plunge in oil prices stemmed from a brief statement issued by OPEC, announcing that the OPEC+ meetings, originally slated for November 25 and 26, 2023, have been rescheduled to Thursday, November 30, 2023.

Earlier in the day, prices had begun to slide after a Bloomberg report suggested that the OPEC+ group’s meeting this weekend could be delayed. According to anonymous delegates quoted by Bloomberg, the November 26 meeting of OPEC+ ministers could be postponed due to Saudi Arabia’s dissatisfaction with the production levels of other members.

Read also: Crude oil prices surge as OPEC+ mulls deeper production cuts

The delegates revealed that the Saudis have been engaging in discussions with other oil producers regarding their output, hinting at a potential delay in the meeting.

Following OPEC’s confirmation of the report, market anxiety heightened over the possibility of a renewed disagreement among OPEC+ members regarding production cuts and the willingness of other members to align with Saudi Arabia’s production reductions.

Prior to the announcement of the delay, analysts widely anticipated that Saudi Arabia, OPEC’s top producer, would extend its voluntary cut of 1 million barrels per day (bpd) into 2024. This expectation was fueled by the recent decline in oil prices to $80 and the typically weak demand for oil during the first quarter of each year.

Market speculation also intensified regarding the possibility of a deeper cut being announced by OPEC+ at their meeting scheduled for November 25-26.

According to multiple reports, the postponement of the meeting has cast doubt on whether other OPEC+ producers will be willing to share the burden of Saudi Arabia’s efforts to boost oil prices.