Oil prices fell nearly 1% in a volatile session on Wednesday as OPEC+ producers unexpectedly delayed a meeting on production cuts, raising questions about global crude supplies.
Brent futures settled 49 cents lower to $81.96 a barrel, after falling more than 4% to a low of $78.41 earlier in the session. U.S. West Texas Intermediate crude settled 67 cents lower at $77.10, after declining more than 5% to a session low of $73.79 earlier in the day.
OPEC+ postponed the meeting, originally scheduled for Nov. 26, to Nov.30, it said in a statement, a surprise development that drove prices sharply lower in early trading. The group was expected to discuss whether to expand oil output cuts.
Prices bounced back after news that the disagreement was related to African countries, which are among the smaller producers in the group, rather than the top oil exporters.
Some traders also pointed to low liquidity ahead of the U.S. Thanksgiving holiday.
The OPEC+ meeting, which includes major producers Saudi Arabia, Russia and other allies and members of the Organization of the Petroleum Exporting Countries, had been expected to consider further changes to a deal that already limits supply into 2024, according to analysts and OPEC+ sources.
The delay stoked concerns that more production could come online from oil producers in the coming months, said Dennis Kissler, senior vice president of trading at BOK Financial.
A rise in inventories also pressured prices lower on Wednesday morning, he said.
U.S. crude oil inventories rose by 8.7 million barrels last week on higher imports, the Energy Information Administration (EIA) said.
The U.S. dollar bounced back from a 2-1/2-month low after economic data showed lower unemployment claims. A rise in the greenback makes dollar-denominated oil more expensive for buyers in other currencies.
Both crude benchmarks have fallen for four straight weeks.
To support prices, OPEC and its allies will need to not only extend, but increase cuts, said John Evans of oil broker PVM in a note.
Earlier this week, an OPEC technical panel invited a top financial market dealer to give a presentation, seen by Reuters, which painted a bearish outlook for the oil market.
Even if the OPEC+ nations extend their cuts into next year, the global oil market will see a slight supply surplus in 2024, the head of the International Energy Agency’s oil markets and industry division said on Tuesday.