Oil prices experienced a further decline on Thursday following a surprising move by OPEC+ to postpone a pivotal policy meeting, underscoring potential discord within the coalition. While stock markets generally showed resilience, the delay in the OPEC+ meeting added uncertainty to the energy market.
The decision to push back the OPEC+ meeting by four days to November 30 had an immediate impact on crude contracts, with both major benchmarks sliding. Prices took another one percent hit on Thursday, following a nearly five percent drop on Wednesday in response to the news.
Reports indicated that the delay resulted from resistance by Angola and Nigeria against lower production targets advocated by other members. Saudi Arabia was reportedly contemplating an extension of a one-million-barrel-a-day output cut into the new year.
Throughout the year, Riyadh and Moscow had implemented significant production cuts to boost oil prices, responding to economic challenges in the United States, Europe, and notably, China.
The move prompted SPI Asset Management analyst Stephen Innes to note, “Oil prices fell after OPEC reported a delay in the weekend, a meeting which hints at a growing rift among OPEC+ producers.” He emphasized the potential impact of increasing US and non-OPEC production on the global market.
Despite Wall Street being closed for the Thanksgiving holiday, equity markets in Europe exhibited positivity, buoyed by improved business activity surveys for Britain and the eurozone. The data suggested gradual improvements, particularly in manufacturing, contributing to a more optimistic sentiment.
In Asian trading, Hong Kong rebounded in the afternoon, supported by reports that China is considering additional support for the property sector. Shanghai, Seoul, Wellington, Mumbai, and Jakarta also experienced gains, while Sydney, Singapore, Taipei, Manila, and Bangkok faced setbacks.
Key economic figures around 1530 GMT indicated a 1.3 percent decline in Brent North Sea crude to $80.92 per barrel and a 1.5 percent decrease in West Texas Intermediate to $75.97 per barrel.
In the financial markets, London’s FTSE 100 closed up 0.2 percent, Paris’ CAC 40 gained 0.2 percent, and Frankfurt’s DAX increased by 0.2 percent. The Hang Seng Index in Hong Kong closed 1.0 percent higher, while the Shanghai Composite rose by 0.6 percent.
Major currency movements included the Euro/dollar edging up to $1.0905 from $1.0888, Dollar/yen rising to 149.62 yen from 148.54 yen, Pound/dollar decreasing to $1.2531 from $1.2594, and Euro/pound slipping to 87.03 pence from 87.14 pence.
The oil market‘s response to the OPEC+ delay and the varied performances in global markets highlighted the delicate balance between geopolitical factors and economic data influencing energy prices and financial markets.