Oil prices fall as OPEC+ talks delays raise supply concerns

In this Jan. 16, 2015, file photo, a person walks past pump jacks operating at the Kern River Oil Field in Bakersfield, Calif. (AP)

SULAIMANI (ESTA) — Oil prices fell on Tuesday amid concerns over mounting supply after leading producers delayed talks on 2021 output policy that extend output cuts as the coronavirus pandemic continues to sap fuel demand.

Brent crude was down 29 cents, or 0.61%, at $47.59 a barrel by 0715 GMT, after dropping more than 1% on Monday.

West Texas Intermediate was down by 26 cents, or 0.57%, at $45.08 a barrel, having dropped 0.4% in the previous session.

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

The grouping, including OPEC, Russia and other allies, had been scheduled to hold its meeting on Thursday after discussions of key ministers on Sunday failed to reach a consensus.

“I suspect that, ultimately, OPEC+ will extend the production cut programme by three months,” said Bob Yawger, director of energy futures at Mizuho Securities, according to Reuters.

But any accord would require some producers to agree to larger cuts moving forward, with those barrels being allocated to the United Arab Emirates (UEA) “for the balance of the agreement”, he added.

The group is due to ease current production cuts by 2 million barrels per day (bpd) from January, but with demand still under pressure from the pandemic, OPEC+ was considering extending current cuts into the first months of next year, a position backed by de facto OPEC leader Saudi Arabia, sources said.

(Esta Media Network/Reuters)

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