Oil prices have edged-down due to concerns over delayed talks by OPEC+ producers on 2021 output policy, which could see an extension of supply cuts as the pandemic continues to dent fuel demand.
Three sources told Reuters that OPEC+ postponed talks on 2021 output policy until 3 December as key players are yet to conclude how much oil they need to pump.
Brent crude futures slipped $0.35 to $47.53 a barrel, while the US West Texas Intermediate (WTI) crude futures fell $0.30 to reach $45.04 a barrel, Reuters reported.
Both the Brent and the WTI contracts gained about 27% in November after positive news by drug manufacturers on the development of Covid-19 vaccine raised economic recovery hopes.
The Organization of the Petroleum Exporting Countries (OPEC), and allies, including Russia, together known as OPEC+, had scheduled to hold its meeting on 1 December after the initial round of discussions on 29 November failed to reach any consensus.
ING Economics stated in a note: “The group needs to extend the deal in order to ensure that the market continues to draw down inventories over the first quarter of next year.
“Vaccine developments are unlikely to significantly change the demand outlook in the next couple of months.”
According to sources, the UAE had ‘complicated the picture’ by hinting that it would be willing to support supply cuts only if compliance of the group members with respect to cut commitments improved.
The group is due to ease current supply cuts by 2Mbpd from January.
However, OPEC+ was considering an extension of the current production cuts as fuel demand is still under pressure due to the pandemic impact.