Oil prices dipped by 1.7% early on Wednesday as a report emerged that this weekend’s meeting of the OPEC+ group will be delayed, and the market expected the OPEC+ meeting and the weekly U.S. inventory report from the EIA later today.
The November 26 meeting of the ministers of the OPEC+ alliance will be postponed due to OPEC leader Saudi Arabia expressing dissatisfaction over the production levels of the other members, delegates have told Bloomberg.
The meeting may be delayed for an unspecified period of time, according to the anonymous delegates who told Bloomberg that the Saudis have been in talks with the other oil producers about their output.
The Kingdom will likely try to persuade other OPEC+ members to make more cuts, hedge fund manager Pierre Andurand told Bloomberg earlier on Wednesday.
Speculation is growing that OPEC’s top producer, Saudi Arabia, will extend its voluntary cut of 1 million barrels per day (bpd) into 2024, considering the latest slide in oil prices to $80 and the typically weak period for oil demand in the first quarter of every year. Market talk is also intensifying that OPEC+ could announce a deeper cut at the group’s meeting in the weekend November 25-26.
The recent weakness in oil prices “has increased noise over what OPEC+ will decide to do at its meeting on 26 November. We continue to expect that Saudi Arabia and Russia will roll over their additional voluntary cuts into early 2024,” ING strategists Warren Patterson and Ewa Manthey wrote on Monday.
“However, what is less clear is whether the broader OPEC+ group will make further cuts,” they added.
A deeper group cut combined with the Saudis and Russians rolling over their voluntary reduction would wipe out the currently expected market surplus in the first quarter of 2024, the strategists noted.
On November 22, bitumen prices in Singapore and South Korea dropped to 495 and 395 USD. Singapore’s HSFO CST180 settled at 463 USD. Bahrain’s bitumen remained at 400 USD, and bulk bitumen of Iran is 303 USD.
Prepared by Rumays specialists group.