Oil prices dropped on Thursday with uncertainty over the OPEC+ production cut, as the group delayed the meeting due to disagreements while a rise in US crude oil inventories add to demand concerns.
International benchmark Brent crude was trading at $48.15 per barrel at 0650 GMT for a 0.21% decrease after closing Wednesday at $48.25 a barrel.
American benchmark West Texas Intermediate was at $44.15 per barrel at the same time for a 0.85% drop after it ended the previous session at $44.53 a barrel.
OPEC and non-OPEC oil-producing nations, like Russia, a grouping dubbed OPEC+, is now expected to meet on Thursday after a two-day delay due to differences between member countries on how much oil to pump next year.
The group may extend the current production cut of 7.7 million barrels per day (bpd) or reduce the volume.
According to the production cut deal signed in April, OPEC’s oil-producing countries will collectively cut 5.8 million bpd starting from Jan. 1, 2021. However, countries like Iraq, Nigeria and Kazakhstan are in favor of a higher production level.
Iraq’s finance minister last week criticized OPEC+’s “one size fits all” view and said the group should take the members' economic and political conditions into consideration when deciding on production quotas.
In addition to the uncertainties over the OPEC+ decision exerting downward pressure on oil prices, US crude oil stocks declined for the week ending Nov. 27.
According to data released by the country's Energy Information Administration (EIA) on Thursday, US commercial crude oil inventories declined by 700,000 barrels relative to the market expectation of a 2.3 million-barrel fall.
To further support prices positively, US drugmaker Pfizer and its German partner BioNTech announced that the UK’s Medicines and Healthcare Products Regulatory Agency (MHRA) granted temporary authorization for emergency use of their COVID-19 vaccine.
This constitutes the first emergency use authorization bringing the companies one step forward in the race for a Phase 3 vaccine trial to help fight the pandemic.
By Sibel Morrow