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Crude oil prices continued their downward spiral Wednesday morning, with Brent down 4.38% at 10:45 a.m. ET, shortly after it was announced that the planned OPEC+ meeting for Sunday would be delayed until November 30.
Brent crude has lost $3.61 on the day, trading at $78.84, with West Texas Intermediate (WTI) down 4.54% at $74.24, for a $3.53 loss on the day.
Oil prices initially started plunging earlier today following a Bloomberg report warning that the OPEC+ meeting may be delayed.
Fears that OPEC+ will further deepen cuts at its next meeting had already put downward pressure on oil prices earlier this week, but the postponement of the meeting has added further concerns over an intensifying spat among the cartel’s members.
Saudi Arabia has expressed dissatisfaction with the production levels of other OPEC members. In June, OPEC+ agreed to limit output, with Saudi Arabia voluntarily cutting production by 1 million bpd and then extending this commitment until the end of this year. Ahead of the delayed meeting, most analysts had expected the Saudis to extend the voluntary production cuts into 2024.
Africa OPEC members Angola, Congo and Nigeria were forced to commit to lower output in 2024, and the originally-scheduled November 26 meeting could potentially have pressured them to make further production cuts, as the Saudis express discontent over compliance with the deal as it shoulders the bulk of the burden.
Nigeria is already pumping more oil than it was supposed to under the deal, with Africa media showing October production at 36,000 bpd above quota.
“If you are in OPEC+ shoes, they must be thinking that something needs to be done,” Christof Ruehl, senior analyst at Columbia University’s Centre on Global Energy Policy, told Bloomberg television. “It will be more difficult for them to do something than people expect. It’s hard to see how they could get on the same page,” he added.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com