U.S. crude prices fell Wednesday after the Organization of Petroleum Exporting Countries delayed a pivotal meeting on production cuts scheduled for the weekend.
The West Texas Intermediate contract for January dropped $3.87, or 4.98%, to $73.90 U.S. a barrel, while the Brent contract for January fell $3.85, or 4.67%, to $78.60 a barrel.
OPEC said in a statement that the meeting of energy ministers is delayed until next Thursday. The organization did not provide a reason, but the talks have run into trouble due to Saudi dissatisfaction with other members’ production levels, delegates told Bloomberg.
Compliance is a major challenge for OPEC and its allies, called OPEC+, because many countries have an incentive to not stick with their production quotas, said Tamas Varga, an analyst with PVM Oil Associates.
There was growing anticipation among traders this week that OPEC+ might implement additional production cuts, as oil has fallen precipitously from September highs amid record non OPEC production and demand concerns in China.
OPEC+ has already taken 5.16 million barrels per day off the market since 2022, which includes 3.66 million bpd from the group and 1.5 million bpd in voluntary cuts from Saudi Arabia and Russia.
