Oil Prices Dropped On Tuesday, OPEC Meeting Postponed For 2 Days

For the second consecutive day, oil prices continued to fall on Tuesday, December 1, losing about 1.7 percent.

In the oil market, worries about the outcome of the OPEC+ talks on supply restrictions for next year are increasing. It was decided to postpone the meeting from 1 December to 3 December as a result of differences between the countries involved in the agreement. At the same time, Saudi Arabia supports keeping quotas at the current level, and if other countries strictly conform to the agreements, the UAE is able to accept such a decision.

On the other end, Russia and Kazakhstan are proposing to start increasing production by 0.5 million barrels per day from January 2021, which however, is lower than the 2 million barrels per day previously decided. Owing to the need to fill the country’s budget, Iraq also rejects the extension of existing restrictions. Oil prices are still expected to retain the current supply constraints at this point, and if the parties do not agree on a change to the terms of the transaction, then oil prices can be changed substantially.

In Norway, meanwhile the state-imposed limits on oil output will be put to an end from the beginning of 2021 onwards. Country’s number of cut-offs from April to June was 250 thousand barrels per day and then decreased to 134 thousand barrels per day. The overall oil output volume in the country in October was 1.611 million barrels per day.

Furthermore the rising oil reserves in the United States are among the negative factors for the oil market. For the week ended November 27, inventories rose by 4.1 million barrels against an increase of 3.8 million barrels a week earlier, according to the American Petroleum Institute (API), although analysts predicted a decrease of 2.272 million barrels. Against the background of a deteriorating pandemic situation in a number of states, the API announces an increase in oil reserves in the country for the third week in a row.