Brent back at $80/bbl as OPEC+ discord and global factors impact crude oil prices

Brent crude prices are hovering around $80 per barrel, marking the fourth consecutive weekly decline in a trend that has captivated the attention of investors and industry experts alike.

The Reserve Bank of India (RBI) projected in April 2023 that the average price of crude oil for the entire year would be around $85 per barrel. The current market conditions indicate that this projection may be subject to revision as the oil industry navigates through complex geopolitical and economic challenges in the coming weeks.

A significant factor contributing to the downward pressure on oil prices is the ongoing discord within the Organization of the Petroleum Exporting Countries (OPEC) and its allies, particularly involving African nations such as Nigeria and Angola. These countries are pushing for higher oil output, a move that runs counter to the current stance of OPEC and its allies, who are wary of further contributing to the existing oversupply in the market.

The scheduled OPEC+ meeting, originally slated for next week, has been rescheduled and will now take place online. The decision to move the meeting to a virtual platform reflects the intensity of the disagreements over production levels within the cartel, amid a persistent slump in oil prices.

The new conference date is set for November 30, a delay of four days from the initial plan. The postponement has already had repercussions, causing crude prices to plummet by as much as 4.9% to dip below the $80 per barrel mark in London on Wednesday.

A significant source of contention in the OPEC+ discussions is the dispute over output quotas for African members, with Saudi Arabia and its allies embroiled in negotiations to find a resolution. The outcome of these talks will likely have a substantial impact on the trajectory of global oil prices in the coming weeks.

Meanwhile, the United States has been experiencing record oil output and surging inventories for the past three weeks, adding to the global supply glut. This surge in production is contributing to the challenges faced by OPEC+ in stabilising the oil market.

Additionally, European business activity in November is exerting further pressure on oil prices. The combination of these global factors has led to crude oil meandering around the $80 per barrel mark, keeping the market on edge as stakeholders closely monitor developments.