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Oil reverses gains, turns negative as OPEC+ uncertainty clouds outlook

Oil prices fell more than $1 a barrel on Wednesday in another see-saw trading session, as investors feared this week’s collapse in OPEC+ talks could mean more supply, not less, is on the way.

Crude markets have been volatile over the last two days following the breakdown of discussions between major oil producers Saudi Arabia and United Arab Emirates. The market has alternated rallies and selloffs, a signal investors are unclear what the OPEC+ standoff means for worldwide production.

Brent crude settled 1.48% lower at $73.43 per barrel. U.S. West Texas Intermediate shed 1.59% to settle at $72.20 per barrel. Earlier, both benchmarks had jumped $1 a barrel, similar to Tuesday’s action.

The Organization of the Petroleum Exporting Countries and its allies including Russia, known as OPEC+, have restrained supply for more than a year since demand crashed during the pandemic.

The group is still maintaining nearly 6 million bpd of output cuts. It was expected to add to supply, but three days of meetings failed to close divisions between Saudis and the Emiratis.

Reference: CNBC