Oil plunges 1% as OPEC+ qualm over output cuts

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Oil plunges 1% as OPEC+ qualm over output cuts

On Monday, both US and UK crude futures’ prices had rounded off the session lower as OPEC+ ministers had failed to reach an accord over the volume of output cuts on Sunday amid growing disagreement among some of the heavily pandemic-battered OPEC+ economies.

Representatives of Saudi-led 14-member pact of Organization of Petroleum Exporting Countries (OPEC) alongside its Kremlin-led allies have been scheduled to meet for another round of negotiations on Tuesday, GMT. 13.00.

Oil pummels as OPEC+ output talks uncertain

In point of fact, the day’s decline in crude oil futures’ prices came amid conflicting narratives on whether the OPEC+ nations would be able to delay a planned output hike as early as by January 2021, while Sunday’s negotiations had compounded further, largely due to a growing grudge among a number of oil-dependent OPEC economies which had been scuffling amid a pandemic-led downturn in crude oil demands alongside an agreed 7.7 million bpd (barrels per day) output cut agreed earlier this year.

Though, Monday’s downfall in crude oil futures’ prices came against the backdrop of a solid November that had witnessed a rise of as much as 27 per cent in crude oil futures’ price, marking up the futures’ biggest monthly rise since May which was mostly pinned on hopes of forthcoming pandemic vaccines that would likely to step up economic activities and lead to a hike in oil demands.

However, the OPEC+ nations had delayed talks of oil production policy to Thursday, at least three sources had unveiled late on the day, which in turn had pared some of the earlier losses for both US and UK crude oil futures’ prices.

Citing statistics, on Monday’s commodity market wrap-up, UK crude futures’ prices dropped 1.2 per cent to $47.59 per barrel, while the US West Texas Intermediate (WTI) crude futures’ prices due to be expired on December 21 fell 0.44 per cent to wind down the day at $45.14 a barrel.

Meanwhile, adding that the global oil market had very few options but relying on OPEC+ decisions until at least an emergency vaccine approval, a senior analyst at Price Futures Group in Chicago, Phil Flynn said, “If we get to the point of an emergency vaccine approval, that would be supportive, but the market understands that for the next couple weeks we’re going to need some support from OPEC.