BREAKING: Oil Trims Weekly Gain Amid OPEC+ Tensions Ahead of Meeting

Photo: Reuters

(Bloomberg) -- Oil fell below $45 a barrel -- but was still on track for a fourth weekly gain -- amid signs of division among the Organisation of the Petroleum Exporting Countries (OPEC)+ members just days before a key policy meeting on whether to extend production curbs.

Futures in New York fell 1.7% from Wednesday, with prices not closing on Thursday due to the Thanksgiving holiday.

While most analysts are forecasting OPEC+ will postpone planned supply increases by three months to March at a meeting next week, some see a chance of a shorter delay amid resistance from the United Arab Emirates and Iraq, which are eager to resume oil sales.

Crude is up around 7% this week as signs Covid-19 vaccines could be rolled out within weeks led to expectations for a swift recovery in energy demand next year.

The gains have happened even as the virus surges in Europe and the U.S., with Germany extending a partial lockdown for at least three more weeks.

OPEC’s president said Thursday the group must remain cautious, with internal data pointing to the risk of a new oil surplus early next year if output is hiked in January.

That came after Iraq’s deputy leader criticized the group this week, saying the economic and political conditions of member countries should be considered before they are asked to withhold production.

The recent oil rally gives leverage to members reluctant to go along, including Iraq and the United Arab Emirates, Standard Chartered’s Paul Horsnell wrote in a note.

Oil is up around 26% this month, with the West Texas Intermediate (WTI) settling technically overbought on Wednesday, a sign that a possible reversal had been on the cards.

Industrial action in Norway, meanwhile, could threaten some oil and gas production.

If a long running safety guard strike isn’t resolved before the weekend, two of the country’s fields may have to stop flows.

Reprinted from Bloomberg. The copyright is reserved by the original author.