Oil slides after OPEC reschedules Tuesday’s meeting for more talks

Oil prices fell on Tuesday after a meeting of Organisation of Petroleum Exporting Countries (OPEC) to decide on production policy failed to reach a consensus and was rescheduled to December 3.

Oil prices, which had been on track to increase by over 20 percent last month, fell early Tuesday. International benchmark Brent crude traded at $47.56, down around 0.65 percent, while US West Texas Intermediate (WTI) fell 0.66 percent to $45.02.

Production cuts are supposed to be lowered by around 2 million bpd to 5.8 million bpd as of January 1, 2021 in line with an agreement in April. But experts say opec+ meeting on tuesday was postponed due to some dissenting voices from ope cranks. These countries, including the ones with strained economies, are in favour of a higher production level.

“The shock to the oil industry is massive and its severe impacts will likely reverberate in the years to come,” Abdelmadjid Attar, OPEC president and Algeria’s energy minister, told the group.

“The pandemic continues to rage with cases soaring in many regions around the world. It continues to affect adversely the global economy and, consequently, the world energy markets, in an unprecedented manner,” he said.

OPEC and allies have since moved to postpone talks through to Thursday, Reuters reported on Tuesday, citing three unnamed sources, as key players disagreed on how much oil they should pump amid weak demand.

The group, which is comprised of some of the world’s largest crude producers, had initially been expected to outline the next phase of production policy on Tuesday.

“Our base case remains that the group will err on the side of caution and heed the market’s anxieties stemming from the virus resurgence on both sides of the Atlantic and unite behind a three months delay in its next phase 1.9m bpd of tapering to April 2021,” said Ehsan Khoman, head of MENA research and strategy at Mitsubishi UFJ Financial Group, in a recent research report.