After leading manufacturers postponed discussions on 2021 output policy, while the coronavirus outbreak continues to reduce fuel demand, oil prices dropped on Tuesday as concerns about increased supply resurface.
Brent crude was down 35 cents, or 0.7% at $47.53 a barrel by 0722 GMT, after dropping more than 1% on Monday. West Texas Intermediate(WTI) was down by 30 cents, or 0.7% at $45.04, having dropped 0.4% in the previous session.
Both contracts rose nearly 27% in November after COVID-19 vaccine developments boosted hopes for economic recovery that could stimulate fuel demand.
The meeting of OPEC, Russia and other allies had had been postponed to Tuesday after Sunday’s ministerial talks failed to reach consensus. Key players still disagree over how much oil they should pump due to weak demand. According to sources, OPEC + postponed its supply policy discussions for next year to Thursday.
Regardless, it’s unlikely that vaccine developments will significantly change the demand landscape in the next few months.
The situation became complicated by the UAE signaling that only if group members’ compliance with cut commitments increases, they may be willing to support supply cuts, sources said.