Crude oil prices were down on Wednesday over the double whammy of an increase in US oil inventories and continuing uncertainty about OPEC+ meeting as investors await a decision from OPEC+ regarding their production policy for 2021.
International benchmark Brent crude was trading at $47.15 per barrel at 0648 GMT for a 0.56% decrease after closing Tuesday at $47.42 a barrel.
American benchmark West Texas Intermediate was at $44.23 per barrel at the same time for a 0.71 % drop after it ended the previous session at $44.55 a barrel.
Late Tuesday, the American Petroleum Institute (API) announced its estimate of a rise of 4.2 million barrels in US crude oil inventories relative to the market expectation of 2.3 million barrels fall.
Although the positive news from drug companies about a viable coronavirus vaccine capped further price declines, investors are monitoring the outcomes of the delayed OPEC meetings amid concerns over a sustained supply glut and weak demand.
The meeting between OPEC and non-OPEC oil-producing countries’, known as OPEC+, which was supposed to be held on Tuesday, was delayed two days as OPEC members failed to reach a consensus on an extension of the existing production cuts deal.
After lowering their oil production first by 9.7 million barrels per day (bpd) in April and then 7.7 bpd in August to balance the oil markets struggling with supply glut and lackluster demand, the group planned to ease the cuts on January, 2021 to 5.8 bpd.
The group is now expected to extend 7.7 bpd cuts for at least three months, however, some member countries blocked the decision for higher oil production levels.
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