Oil Prices Down as Fears of OPEC+ Supply Cut Subside

Oil prices took a break on Wednesday after rising over 4% the previous day on fading fears of an upcoming output cut by OPEC.

At 10:00 AM Thai time, Brent crude futures had dropped 45 cents, or 0.45%, to $99.77 per barrel following a 3.9% gain on Tuesday. After rising 3.7% the day before, the price of U.S. West Texas Intermediate crude futures contract dipped 27 cents, or 0.29%, to $93.47 per barrel.

After de facto OPEC leader Saudi Arabia hinted at the potential of imposing cutbacks to balance a market it described as “schizophrenic,” both contracts jumped on Tuesday.

The leader of OPEC, Saudi Arabia, stated on Monday that the group is prepared to reduce output in order to reverse a recent drop in oil prices caused by low futures market liquidity and macro-economic concerns, which has ignored extremely tight physical crude supply.

Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman was quoted as saying to Bloomberg that OPEC+ has the resources and flexibility to cope with challenges, according to the Saudi state news agency SPA.

However, nine OPEC sources told Reuters on Tuesday that prospective OPEC+ production cuts may not be immediate and are likely to coincide with the return of Iran to oil markets should that nation achieve a nuclear deal with the West.