Oil prices increased their losses on Wednesday due to two negativities. On top of the surprising increase in oil inventories in the US, OPEC and its allies postponed the meeting to decide whether to increase production in January, which was previously planned, and left the markets in uncertainty.
OPEC and its allies, including Russia, postponed the talks of next year’s oil production policy from Tuesday to Thursday. It is said that there is also a possibility of the OPEC + alliance may fail to reach an agreement.
Brent crude oil futures were down by 41 cents, or 0.9%, at $47.01 a barrel by 0358 GMT, while West Texas Intermediate (WTI) crude was down by 46 cents, or 1%, at $44.09.
Industry data showed US crude inventories rose 4.1 million barrels last week, compared to analysts’ expectations of a 2.4 million barrel draw.
The reappeared virus has increased travel restrictions across Europe and the USA. If the OPEC + alliance fails to reach an agreement, it is estimated that the market surplus in the first half of next year could be as high as 1.5 million to 3 million barrels a day.
By the way the United Arab Emirates (UAE) said it will struggle to maintain the same deep production cuts in 2021.
Still, losses in oil prices remained limited by rising hopes of the COVID-19 vaccine, which could spur fuel demand.