Crude-oil prices settled sharply lower Thursday, after OPEC failed to offer details on its expected production cut, opting to wait until after it meets with other producers Friday. Growing concerns that oil producers won’t reach an agreement to aggressively reduce output has also weighed on prices, but U.S. government data revealing the first decline in domestic crude supplies in 11 weeks did offer a brief respite in prices from the session’s lows.
The large draw in U.S. crude stockpiles was “surprising,” but the data also showed production held up at a record, said Tariq Zahir, managing member at Tyche Capital Advisors. The market’s focus remains on OPEC, he added.
No decision from OPEC yet
Members of the Organization of the Petroleum Exporting Countries have concluded their meeting in Vienna, without deciding on output-cut figures, the Wall Street Journal reported, citing comments from OPEC delegates. The delegates also said OPEC plans to debate output figures with non-OPEC producers during their meeting Friday. Oil prices were under pressure, “somewhat reflecting the selloff in stocks, some reflecting skepticism OPEC will come through with sufficient production cuts to support prices,” said Rob Haworth, senior investment strategist at U.S. Bank. “U.S. production remains robust, although if prices remain close to these low levels production growth could falter. For now, we believe prices [will] remain under pressure, even if OPEC can come through with production cuts,” he said.
The cartel is under pressure to support prices, which have fallen by more than 30% since reaching multiyear highs in October.
