Crude Oil Falls Over 4% as OPEC+ Unexpectedly Delays Key Meeting
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Crude Oil Falls Over 4% as OPEC+ Unexpectedly Delays Key Meeting

Crude oil prices fell more than 4% on Wednesday after OPEC+ producers postponed their ministerial meeting for November 30.
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Crude oil prices plunged more than 4% on Wednesday after OPEC+, the alliance of leading oil-producing countries, delayed its much-anticipated meeting without explaining why. In the meantime, speculations are growing that Saudi Arabia is expected to extend its voluntary production cuts into 2024, while some believe that the Kingdom and other OPEC+ members may even deepen the current reductions

OPEC+ Delays its Meeting For November 30

Oil prices fell notably on Wednesday after the OPEC+ members delayed a meeting planned for Sunday, adding to the uncertainty over future crude production reductions. 

Brent crude futures fell more than 4.3% to $78.87, and the US West Texas Intermediate (WTI) slipped by 4.4% to $74.28. 

OPEC+ producers postponed its ministerial meeting to November 30 from November 26, the organization wrote in a statement without citing specific reasons. The move was announced hours after Bloomberg reported that the meeting could be delayed for an undefined period after Saudi Arabia raised concerns over other member’s output data. 

The Kingdom is expected to attempt to persuade other OPEC+ producers to make additional cuts, according to hedge fund manager Piere Andurand. It is rumored that Saudi Arabia is set to extend its voluntary cut of 1 million barrels per day (bpd) into 2024 amid the recent decline in oil prices and an anticipated drop in demand in Q1. 

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OPEC+ Meeting Could Introduce Deeper Cuts

Meanwhile, there have been speculations that OPEC+ could announce a deeper cut at the upcoming meeting. 

That move, alongside Saudi Arabia and Russia’s plan to roll over their voluntary reductions, would erase the currently expected market surplus in Q1 2024. Prospects of further cuts increased after oil prices witnessed a sharp sell-off despite a supply deficit, but also due to risks of additional disruptions amid the escalating conflict in the Middle East

Saudia Arabia, Russia, and other OPEC+ producers have pledged roughly 5 million bpd in total output cuts, representing around 5% of daily global demand. The Kingdom was the first to introduce a voluntary cut of 1 million bpd for July and extended it into the end of 2023, in addition to the wider supply-limiting OPEC+ deal. 

Despite strong fundamentals, oil prices have been trending downward recently. Do you expect this trend to persist into 2024? Let us know in the comments below.