Oil prices fell very slightly today, Wednesday, after rising more than 3% in the previous session ahead of the OPEC+ producers’ meeting, which discussed a significant cut in oil production.
Dealers said the dollar’s strength was the main reason for the slight decline in prices as demand from buyers using other currencies decreased.
Brent crude, the international benchmark, fell 22 cents, or 0.2%, to $91.58 a barrel after rising $2.94 in the previous session, Reuters reported.
U.S. West Texas Intermediate futures also fell 29 cents, or 0.3%, to $86.23 a barrel after rising $2.89 in the previous session.
An OPEC source told Reuters that the Organization of the Petroleum Exporting Countries (OPEC) and Russia-led allies in the so-called OPEC+ group will meet in Vienna later on Wednesday to discuss output cuts to 2 million bpd.
A cut of this size would be the largest OPEC+ production cut as demand has been hit by the Covid-19 pandemic in 2020.
“I wouldn’t be surprised if the ‘buy the rumor, sell the news’ statement comes true, because the strong rise in crude oil prices could be the reason for this production cut,” said Tina Ting, an analyst at CMC Markets.
The U.S. is urging OPEC+ producers to avoid deep cuts, and President Joe Biden is keen to keep U.S. gasoline prices from rising, a source told Reuters.
The real supply impact of a lower production target will be limited, as many OPEC+ countries are already producing far less than their current quotas.
In August, OPEC + did not fulfill the production plan for 3.58 million barrels per day.
However, analysts at ANZ Research said in a note that the deal for the major cuts would “send a strong signal that the group is determined to support the market,” adding that it “would lead to a significant tightening of the market.”
U.S. crude inventories for the week ended Sept. 30 fell by about 1.8 million barrels, according to market sources citing data from the American Petroleum Institute on Tuesday.