Oil Prices Drop Further After OPEC+ Delay

Posted by African Examiner Business News, Latest Headlines Thursday, November 23rd, 2023

(AFRICAN EXAMINER) – Oil prices sank further Thursday after the shock decision by OPEC+ to delay a key policy meeting, suggesting fresh discord in the bloc.

Stock markets, meanwhile, traded mixed after two US reports dented recent euphoria over the future of interest rates.

Both main crude contracts slid on news that the much-anticipated gathering of OPEC+, an alliance of major producers led by Saudi Arabia and Russia, would be put back by four days to November 30.

Prices declined by another one percent on Thursday, having dived by almost five percent at one point on Wednesday following the news.

Reports said the decision was made after Angola and Nigeria pushed back against lower targets that were urged by others, with Saudi Arabia said to have been preparing to extend a one-million-barrel-a-day output cut into the new year.

Riyadh and Moscow unveiled massive cuts earlier this year in a bid to boost prices, which have come under pressure owing to stuttering economies in the United States, Europe and particularly China.

“Oil prices fell after OPEC reported a delay in the weekend, a meeting which hints at a growing rift among OPEC+ producers,” noted SPI Asset Management analyst Stephen Innes.

“With US and non-OPEC production on the rise, it should be no surprise that producers want to pump more oil, not trim production, for fear of losing even a tiny sliver of the market share.

“And the ceasefire in the Israel-Hamas war gives hope for some stability in the region.”

Equity markets in Europe and Asia fluctuated, even after a fresh pre-Thanksgiving jump on Wall Street.

Hong Kong bounced back from morning losses to edge higher in the afternoon, with developers in ascendance as it emerged China is preparing to offer the property sector more support, calling for banks to do more for the industry.

That came after Bloomberg News reported on Wednesday that authorities had drawn up a draft list of 50 firms that would be eligible for more monetary support.

Elsewhere, Shanghai, Seoul, Wellington, Mumbai and Jakarta also rose but Sydney, Singapore, Taipei, Manila and Bangkok were in retreat.

Paris and Frankfurt stocks also gained ground but London lapsed into modest losses heading toward the half-way stage.

The tepid performances came after data showed a pick-up in inflation expectations among US consumers, who now see it at 4.5 percent over the next year, against 4.4 percent previously expected, according to the University of Michigan.

Separately, US jobless claims came in far lower than forecast, showing that the labour market continues to hold up.

The Federal Reserve has repeatedly said it would make its interest-rate decisions based on data, particularly inflation and jobs.

– Key figures around 1145 GMT –
Brent North Sea crude: DOWN 1.0 percent at $81.11 per barrel

West Texas Intermediate: DOWN 1.0 percent at $76.34 per barrel

London – FTSE 100: DOWN 0.1 percent at 7,462.29 points

Paris – CAC 40: UP 0.2 percent at 7,277.67

Frankfurt – DAX: UP 0.1 percent at 15,977.72

EURO STOXX 50: UP 0.1 percent at 4,357.14

Hong Kong – Hang Seng Index: UP 1.0 percent at 17,910.84 (close)

Shanghai – Composite: UP 0.6 percent at 3,061.86 (close)

Tokyo – Nikkei 225: Closed for a holiday

New York – DOW: UP 0.5 percent at 35,273.03 (close)