Oil prices dropped further on Thursday as traders digested a delay by the Organization of the Petroleum Exporting Countries for its next meeting, which has been bumped to next week.
On a day when the U.S. is off for the Thanksgiving holiday, traders took the decision to push back the summit until next week as an indication that there may be some resistance to making further cuts to output targets. OPEC said Thursday that the Nov. 30 meeting will be held online.
West Texas Intermediate, the U.S. benchmark, traded down 8% to $75.72 a barrel. Brent crude, the international standard, was down 1.7% at $80.53. Both contracts are down more than 5% this year.
Lower oil prices have raised expectations that OPEC, which has already limited its output to keep prices higher, would step up its efforts to limit the amount of oil in the market. Russia and Saudi Arabia have made voluntary additional output cuts on top of lower OPEC quotas.
But it’s not always a straightforward decision, as some OPEC members may not want to lower output as they rely on the income from sales. Oil prices fell almost 5% on Wednesday when the OPEC delay was announced before recovering most of the losses later in the day.
OPEC didn’t give an official reason for pushing back the meeting, leaving traders to guess. But it does suggest that the unity of the bloc could be in question.
Write to Brian Swint at [email protected]
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