Oil prices have edged-up as major producers, including Saudi Arabia and Russia ‘locked horns’ over the need for production cuts extension.
Production cuts were initiated during the first wave of the Covid-19 pandemic in order to support oil prices.
Brent crude futures were up by $0.21 to $48.46 a barrel, while the US West Texas Intermediate (WTI) crude futures rose $0.11 to reach $45.39 a barrel, Reuters reported.
The Organization of the Petroleum Exporting Countries (OPEC), and allies, including Russia, together known as OPEC+, resumed talks on 3 December to finalise output policies for the next year.
The group’s initial round of discussions on 29 November failed to reach any consensus on how to manage weak oil demand amid a second wave of the Covid-19.
The OPEC+ is expected to roll over oil cuts of 7.7Mbpd at least until March.
However, positive news over the fast development of the anti-virus vaccines generated a rally in oil prices at the end of last month.
This made some producers question the need to ‘tighten oil policy’ and this view has been supported by OPEC leader Saudi Arabia.
ING Economics said in a note: “It is still expected that the group will come to a deal.”
Meanwhile, data released by the US industry group Energy Information Administration (EIA) showed a fall in the US crude stockpiles and a sharp rise in gasoline and distillate inventories last week.
According to the data, oil stocks fell by 679,000 barrels, gasoline stocks were up by 3.5 million barrels and distillate inventories rose by 3.2 million barrels last week ending 27 November.