Oil prices fell today, Tuesday, as markets awaited an OPEC + meeting on global oil production cuts, to face the repercussions of Corona.
Oil prices lost 2% today, after OPEC + countries postponed holding talks on oil production policy in 2021 until Thursday.
Brent crude fell 75 cents to $ 47.13 a barrel by 1604 GMT, and US West Texas Intermediate crude fell $ 1.08 to $ 44.26 a barrel.
The two benchmarks rose about 27% in November, supported by hopes that Covid-19 vaccines would revive the global economy and demand for fuel, and supported by expectations that oil producers would keep production restrictions in light of a second wave of the virus.
In April 2020, OPEC and its allies, major independent producers, agreed to reduce oil production by about 9.7 million barrels per day in early May.
The OPEC + alliance reduced its agreement by about 2 million barrels of oil per day to 7.7 million barrels per day from the beginning of August until the end of December 2020.
According to the coalition agreement, the restrictions of the production cut agreement will be reduced by another 2 million barrels to 5.8 million barrels per day, starting in January 2021, but the high number of Coronavirus infections in the United States and Europe may not help the coalition to move forward. Implement this plan.
Jim Ritterbusch, president of Ritterbusch & Co. said, “The apparent stumbling blocks in the OPEC talks that led to the postponement of OPEC + meetings until Thursday undermined the momentum of the oil price hike that was impressive last month.”
In light of continued weak demand, sources say OPEC + is considering extending the existing cuts to the first months of next year, a position supported by Saudi Arabia, the largest producer in OPEC. In contrast, Russia favors a gradual lift.
“The group will likely reach a face-saving settlement … the most likely result is a short extension followed by a gradual return to production,” said Helima Croft of RBC.
A Reuters poll of 40 economists and analysts expected the average price of Brent crude to reach $ 49.35 a barrel next year.