OIL PRICES SINK AS OPEC+ DELAYS SUPPLY TALKS

Oil prices fell on Tuesday as concerns over mounting supply returned to the fore after leading producers delayed talks on 2021 output policy that could extend cuts as the coronavirus pandemic continues to sap fuel demand, Aaron Sheldrick reported for Reuters on December 1, 2020.

Brent crude was down 26 cents, or 0.5% at $47.62 a barrel by 0550 GMT (1:50 p.m. in Manila), after dropping more than 1% on Monday. West Texas Intermediate was down by 23 cents, or 0.5% at $45.11 a barrel, having dropped 0.4% in the previous session. Still, both contracts surged around 27% in November after COVID-19 vaccine developments raised hopes of an economic recovery that could boost fuel demand.

OPEC+ delayed talks on output policy for next year until Thursday, three sources told Reuters, as key players still disagreed on how much oil they should pump amid weak demand.

The grouping, including the Organization of the Petroleum Exporting Countries (OPEC), Russia and other allies, had been scheduled to hold its meeting on Tuesday after discussions of key ministers on Sunday failed to reach a consensus.

“The group will probably find some face-saving compromise, with a short extension being the most likely outcome followed by a phased production return,” RBC Capital Markets said in a note. “Nonetheless this latest fracas does not bode well for collective cohesion in 2021 as vaccine optimism abounds and producers anticipate a strong recovery,” RBC said.