Today, oil prices were found to be falling, reversing the sharp increase that occurred in the previous two sessions. This is because many investors are more cautious ahead of the OPEC+ meeting this Sunday with the expectation that exporting countries are likely to increase supply cuts.
Brent crude oil prices fell 64 cents (0.8%) to $81.68 a barrel. Meanwhile, the US West Texas Intermediate crude oil price was at $77.21 per barrel with a decline of 62 cents (0.8%).
Both contracts were up 2% on Monday after three sources told Reuters that OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and its allies were considering further oil supply cuts at their meeting on November 26.
According to Senior Economist at NLI Research Institute, investors are taking a wait-and-see attitude for the actual confirmation of OPEC+.
He also said that OPEC+ is likely to extend or increase oil supply cuts into next year as predicted.
Additionally, RBC Capital analysts said they see some room for OPEC+ to make deeper cuts. However, they expect that Saudi Arabia plans to get additional barrels from other members to coordinate the burden sharing.
Oil prices are down about 16% since the end of September as US crude producers maintain production at record levels. Meanwhile, the market is worried about the level of demand especially from the world's largest importer, China.
