Oil dropped toward $45 a barrel as a consensus within OPEC+ to postpone an output hike planned for January remained elusive ahead of a meeting of the cartel’s power brokers later on Monday.
Futures in New York declined 1.1% in Asian trading. Most participants in an informal discussion of OPEC+ ministers on Sunday supported keeping production curbs at current levels into the first quarter, said one delegate, although there was opposition from the United Arab Emirates and Kazakhstan.
The Trump administration, meanwhile, is poised to add four Chinese companies including energy giant China National Offshore Oil Corp. to a list of firms owned or controlled by China’s military, Reuters reported. Worsening relations between the world’s two largest economies may threaten energy demand.
Oil is set for the biggest monthly gain since May on signs of Covid-19 vaccine breakthroughs, raising optimism for a long-term rebound in fuel consumption. Unless the existing OPEC+ agreement is revised this week, however, producers will restart about 1.9 million barrels a day of halted output, potentially pushing the global market back into surplus.