Image: (APA/AFP/OLIVIER CHASSIGNOLE)
The meeting will be postponed to November 30th, OPEC announced on its website on Wednesday. Oil prices reacted to the news with significant discounts.
Both the North Sea variety Brent and the US brand West Texas Intermediate (WTI) fell noticeably. In an initial reaction, the prices for a barrel (159 liters) fell by a good three US dollars each to $79.35 (Brent) and $74.66 (WTI).
“Uncertainty is never good”
As Bloomberg reported, major producer Saudi Arabia is dissatisfied with the production of other producing countries. Saudi Arabia has voluntarily reduced production in recent months to support oil prices. Russia, which together with the Saudis leads the larger OPEC+ network, is taking a similar approach. Talks between the OPEC countries were difficult, the agency reported.
“Uncertainty is never good for financial markets as markets will now have to wait longer to get clarity on what OPEC+ will do next year,” said UBS analyst Giovanni Staunovo. “The postponement of the meeting also shows that there are sometimes different views among the group participants.”
Will restrictions be extended?
Some observers expect the cut in oil supplies to be extended or even worsened next year. “We see scope for a greater reduction for the group,” said analyst Helima Croft from RBC Capital. But Saudi Arabia could ask other members to throttle back more to share the burden more. DiOPECec+, which brings together the Organization of the Petroleum Exporting Countries (OPEC) and other producers such as Russia, produces around 40 percent of global supply. Your decisions can have a direct impact on the price of oil.
In recent weeks, oil prices have largely fallen due to economic concerns. This raised the question among market participants as to how the OPEC countries want to proceed. It was previously considered likely that the current production restrictions would be extended into the coming year. But experts have not ruled out an additional cut.
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