Oil prices fell on Wednesday, taking a breather from a near 4 percent surge the previous day, on receding fears of an imminent output cut by the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+.
Global benchmark Brent crude futures fell 40 cents, or 0.4 percent, to $99.82 a barrel, after rising 3.9 percent on Tuesday.
The US West Texas Intermediate crude futures contract was down 27 cents, or 0.29 percent, at $93.47 a barrel, having jumped 3.7 percent the previous day.
Both contracts soared on Tuesday after the energy minister of de facto OPEC leader Saudi Arabia flagged the possibility of supply cuts to balance a market it described as “schizophrenic”, with the paper and physical markets becoming increasingly disconnected.
“While Abdulaziz bin Salman’s comment may have achieved more than putting a floor under crude prices, we expect it to follow the law of diminishing returns, unless it is followed up by more signals or action from OPEC+ to restrain output,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
With OPEC+ already delivering about 2.8 million barrels-per-day less than its monthly target, the maths of cutting production is going to be more complicated than usual, not to mention the politics of it, Hari added. – Reuters