Oil Extends Losses Despite Suggestion That OPEC Angst Is Overdone

by Ship & Bunker News Team
Thursday November 23, 2023

Crude traders on Thursday were still shaken by the Organization of Petroleum Exporting Countries (OPEC) delaying a meeting on production cuts, and even though the cartel has rescheduled for next Thursday the concern is that the cuts might not be deepened; oil prices once more fell accordingly.

Brent settled down 68 cents at $81.28 per barrel, while West Texas Intermediate settled down 75 cents at $76.35 per barrel.

OPEC's challenge, according to officials, is that members Angola and Nigeria want to achieve higher oil output; this caused Helima Croft, analyst at RBC Capital Markets, to say, "We think Nigeria can be assuaged as the leadership values its longstanding OPEC membership and improving ties with Saudi Arabia.

"However, it may be more difficult to bridge the gap with Angola, which has been a moodier member of the producer group since it joined in 2007."

Citigroup Inc. analysts including Eric Lee said in a note that the OPEC meeting delay "heightens the drama, probably not the outcome."

Indeed, while crude prices initially plunged over 4 percent on word of the delay and Angola now finds itself in an unfavourable spotlight, Angola OPEC governor Estevao Pedro assured media that his country is not considering quitting OPEC:  "There's no thinking in that direction."

Compounding Thursday's bleak sentiment was a survey suggesting that euro zone business activity will contract during this quarter as consumers continue to rein in spending – even though the survey also noted that downturn in activity eased in November.

For his part, Phil Flynn, senior market analyst at Price Future Groups Inc. said the downside to the market this week was overdone and will rally next week after traders return from the U.S. Thanksgiving holiday.