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LONDON:
Oil prices fell on Thursday as producers, including Saudi Arabia and Russia, were faced with the need to extend record production cuts set during the first wave of the Covid-19 pandemic.
Brent crude was down $ 0.26, or 0.5%, to $ 47.99 a barrel at 1151 GMT, and US oil was down $ 0.29, or 0.6%, to $ 44.99 the barrel.
“The market is cautious. Oil prices lost some gains this week as negotiations within OPEC + did not turn out to be as smooth as expected, ”said Rystad Energy’s head of oil markets, Bjornar Tonhaugen.
“Prices are logically falling marginally, but the trend could be reversed quickly in case some white smoke comes out of the OPEC + meeting,” he added.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, known as OPEC +, will resume discussions Thursday to agree policies for 2021 after previous talks produced no commitment on how to address weak oil demand in the midst of a new wave of coronavirus.
Two OPEC + sources told Reuters on Thursday that the group is leaning toward a renewal of oil cuts with a gradual increase in production in the coming months.
OPEC + was expected to roll over oil cuts of 7.7 million barrels per day, or 8% of world supplies, at least through March 2021.
But after hopes for swift approval of Covid-19 vaccines spurred a rebound in oil prices in late November, some producers questioned the need to tighten oil policy, which has the support of the OPEC leader. , Saudi Arabia.
“The group is still expected to reach an agreement,” ING Economics said in a note.
Britain approved Pfizer Inc.’s Covid-19 vaccine on Wednesday, ahead of a global race to launch the most crucial mass inoculation program in history.
In the United States, crude reserves fell last week, while gasoline and distillate inventories rose sharply as refineries slowed production amid weakening demand, the Energy Information Administration said on Wednesday.
Oil stocks fell 679,000 barrels in the week through November 27, less than the 2.4 million barrel drop forecast in a Reuters analyst survey.
Gasoline inventories increased by 3.5 million barrels while distillate stocks increased by 3.2 million barrels.
In addition to international supplies, Venezuela’s crude exports nearly doubled last month, according to data from state-owned PDVSA and Refinitiv Eikon.
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