Oil prices dived today following the news that the Organisation of the Petroleum Exporting Countries (OPEC+) has postponed its upcoming meeting.
This Sunday’s meeting of OPEC and allies such as Russia, known as OPEC+, had been expected to consider potential further supply cuts.
According to Bloomberg News, the meeting will delayed after Saudi Arabia expressed its dissatisfaction with other members about their output numbers.
The delay to next week’s meeting came as a surprise to markets, with Brent crude falling almost $4 a barrel, or almost 5 per cent, to $79 following the news.
The move is potentially illustrative of the disconnect between Saudi Arabia and its other oil producing counterparts within OPEC+.
“In order to retain the narrative of carefully managing the market and push oil prices above $80p/b on a sustainable basis, OPEC+ needs to cut more,” Kpler’s lead crude analyst Viktor Katona told City A.M.
“Saudi Arabia is already feeling the budgetary squeeze coming from lower production levels so it is unlikely to have everyone piggyback on them.”
In practise, this requires Riyadh to encourage other countries to cut; an unlikely ambition given the booming combination of high exports and high prices that other OPEC+ members have been enjoying recently.
“That dilemma makes it very difficult to see a deal right now,” Katona added.