Oil falls as OPEC+ talks delays raise supply concerns

TOKYO, Dec 1 (Reuters) - Oil prices slipped on Tuesday amid
concerns over mounting supply after leading producers delayed
talks on 2021 output policy that could extend production cuts as
the coronavirus pandemic continues to sap fuel demand.
Opening trading for December Brent crude LCOc1 was down 20
cents, or 0.4% at $47.68 a barrel by 0136 GMT, after dropping
more than 1% on Monday. West Texas Intermediate CLc1 was down
by 27 cents, or 0.6% at $45.07 a barrel, having dropped 0.4% in
the previous session.
Still, both contracts surged around 27% in November, the
biggest monthly gains since March after COVID-19 vaccine
developments raised hopes of an economic recovery that could
boost fuel demand.
OPEC+ delayed talks output policy for next year until
Thursday, three sources told Reuters, as key players were still
in disagreement on how much oil they should pump amid weak
demand. The grouping, including the Organization of the Petroleum
Exporting Countries (OPEC), Russia and other allies, had been
scheduled to hold its meeting on Tuesday after discussions of
key ministers on Sunday failed to reach a consensus.
"I suspect that, ultimately, OPEC+ will extend the
production cut programme by three months," said Bob Yawger,
director of energy futures at Mizuho Securities. But any accord
would require some producers to agree to larger cuts moving
forward, with those barrels being allocated to the United Arab
Emirates (UEA) "for the balance of the agreement", he added.
Sources said the UAE had complicated the picture by
signalling it would be willing to support a rollover of supply
cuts only if group members' compliance with cut commitments
improved.
The group is due to ease current production cuts by 2
million barrels per day (bpd) from January, but with demand
still under pressure from the pandemic, OPEC+ was considering
extending current cuts into the first months of next year, a
position backed by de facto OPEC leader Saudi Arabia, sources
said. A Reuters poll of 40 economists and analysts forecast Brent
would average $49.35 a barrel next year, estimating that prices
would have some trouble sustaining a rally.