Oil futures drifted lower Thursday, ahead of a meeting of major producers that appeared to be headed toward an agreement that would allow production to rise modestly beginning early next month in a gradual relaxation of existing production curbs.
West Texas Intermediate crude for January delivery
fell 41 cents, or 0.9%, to $44.87 a barrel on the New York Mercantile Exchange. February Brent crude
the global benchmark, was off 34 cents, or 0.7%, at $47.91 a barrel on ICE Futures Europe.
Oil has lost ground this week after the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, postponed a Tuesday meeting that had been expected to see them agree to delay a relaxation of existing output curbs that have restrained production by 7.7 million barrels a day. Without a delay, those cuts would be relaxed by 2 million barrels a day in January.
“The market has largely priced in rolling over current cuts for an additional three months, anything less than this will likely leave the market disappointed,” said Warren Patterson, head of commodities strategy at ING, in a note.
The postponed meeting was set to get under way on Thursday. Some producers had argued that the rise in oil prices tied in part to optimism over progress toward a COVID-19 vaccine left room for some increase in output.
The Wall Street Journal reported early Thursday that OPEC+ members were closing in on an agreement to increase their collective oil output by as much as 500,000 barrels a day starting next month.