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By Gina Lee
Investing.com – Oil fell Tuesday morning in Asia, and investors were unclear whether the world’s top producers would extend production cuts, which would support oil prices.
They were down 0.71% to $ 47.54 at 11:55 PM ET (3:55 AM GMT) and down 0.79% to $ 44.98.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC +) postponed talks on production policy until Thursday, Reuters reported. The market is now waiting to see whether the organization will continue current production cuts of 7.7 million barrels per day or stop those cuts. The group originally planned to cut cuts by about 2 million bpd starting in January, but demand remains weak.
Some investors expected the cuts to take place.
“I suspect that ultimately OPEC + will extend the production cut program for three months,” Mizuho Securities director of energy futures Bob Yawger told Reuters.
But any deal would require some producers to agree to bigger cuts in the future, with those barrels assigned to the United Arab Emirates (UEA) “for the rest of the deal,” Yawger added.
November was a strong month for oil, with both benchmarks increasing by about 27% as investors clung to the hope that a vaccine will accelerate the return to normal of the COVID-19 lockdowns.
Investors are now weighing a renewed surge in COVID-19 cases around the world and new lockdowns in places as disparate as London, Hong Kong and New York, as well as the likely approval of multiple COVID-19 vaccines in the coming weeks. Modern Inc (NASDAQ 🙂 will seek authorization for its mRNA-1273 vaccine candidate in the United States and Europe, the company said Monday.
Investors are also looking to distill testimony from US Federal Reserve Chairman Jerome Powell and Treasury Secretary Steve Mnuchin before the Senate Banking Committee on Monday, who said the US economy is in the dark. road to recovery but you will need help.
Mnuchin asked Congress to use the CARES Act, valued at $ 455 billion, to launch a stimulus package to boost the economy. Powell, in turn, pointed to moderate growth as a concern.
Powell will continue to testify before Congress later in the day and Wednesday, and the Fed will meet for its policy meeting on December 15-16.
Also supporting prices, China for November stood at 54.9 in November, down from 53.6 in October.
Investors are now waiting, which expire later in the day.
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