ISLAMABAD: Crude oil prices continued coming down on Thursday amid Thanksgiving holidays in the United States and a sharp build-up in US crude stocks, besides rescheduling of the Opec+ meeting. As of 1325 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, shed $0.98 (-1.20 percent) to reach $80.98 a barrel. The West Texas Intermediate (WTI), the main oil benchmark for North America, went down by $0.99 (-1.28 percent) to $76.11 a barrel. However, the price of Russian Sokol increased by $0.46 (+0.60 percent) to $77.03. Arab Light prices witnessed an increase of $0.46 (+0.53 percent) to reach $86.92 a barrel. On the other hand, the price for Opec Basket increased to $84.75 a barrel with an increase of $0.31 (+0.37 percent). The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey. TLTP
Wednesday’s drop in prices was caused by news that OPEC+ is delaying its meeting, originally scheduled for upcoming Sunday, to next Thursday. The latest EIA oil inventory report then added to downward pressure on oil prices by showing a sizable build in U.S. crude stocks.
Brent and West Texas Intermediate shed more than 1% earlier in the day amid media reports that there appeared to be disagreement among OPEC members on the production levels the cartel was aiming for. The reports said the dispute focused on African members. Analysts have suggested that Angola, Nigeria, and Congo want to have their production quotas raised from the levels agreed at a meeting in June.
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. Since then, Saudi Arabia has expressed dissatisfaction with the production levels of other OPEC members. The analysts said they did not expect any surprises from the OPEC meeting, with Saudi Arabia most likely to extend its voluntary cuts of 1 million bpd for another month. The rest of OPEC would probably stick to their current quotas, the analysts predicted.
Fears that OPEC+ will further deepen cuts at its next meeting put downward pressure on oil prices earlier this week, but the postponement of the meeting has added further concerns over the intensifying spat among the cartel’s members. Ahead of the delayed meeting, most analysts had expected the Saudis to extend the voluntary production cuts into 2024.
Thursday is a public holiday in the United States for Thanksgiving. The US crude stocks rose by nearly 9.1 million barrels in the week ended November 17, according to media reports. Gasoline inventories dropped by about 1.79 million barrels, while distillate inventories fell by about 3.5 million barrels. The US government data on stockpiles is due on Wednesday.
