Oil falls despite OPEC+ keeping output steady

Earlier in session, crude benchmarks rose and fell $1 per barrel

NEW YORK:

Oil prices fell from multi-month highs in volatile trade on Monday as US stocks eased on concerns over the outcome of runoff elections in Georgia.

The market declined despite expectations the Organisation of the Petroleum Exporting Countries (OPEC) and allies will hold off on increasing output in February and optimism over a vaccine-driven economic recovery.

Brent futures dropped $0.73, or 1.4%, to $51.07 a barrel by 1556 GMT, while US West Texas Intermediate (WTI) crude fell $0.93, or 1.9%, to $47.59.

Earlier in the session, both benchmarks rose and fell by $1 a barrel with WTI reaching its highest since February and Brent its highest since March.

The S&P 500 and the Dow also eased from record levels on the first trading day of the year as President Donald Trump travels to Georgia in a bid to keep the US Senate in the hands of his Republican Party. OPEC and allies, a group known as OPEC+, were meeting on Monday. Most OPEC+ officials voiced opposition to increasing oil output from February when they met on Sunday, three OPEC+ sources told Reuters.

OPEC+ increased output by 500,000 barrels per day (bpd) this month but some members have questioned the need to increase more from February due to an upsurge in the Covid-19 pandemic.

Published in The Express Tribune, January 5^th, 2021.

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