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Brent crude for January delivery, a contract that expires on
Monday, dropped 69 cents, or 1.4%, to $47.49 a barrel by 1220
GMT. The more actively traded February Brent contract was down
65 cents at $47.60.
U.S. West Texas Intermediate crude for January fell 53 cents, or
1.2%, to $45.00 a barrel.
"Last week’s optimism is taking a hit this morning and longs are
edging towards the exit ahead of the OPEC+ talks," said oil
broker PVM's Tamas Varga, after OPEC+ failed to agree on policy
in informal talks ahead of Monday and Tuesday's formal meetings.
"Some member countries will be hard to convince about further
output discipline and in case of an unexpected fallout not only
the price repercussions will hurt producers, but the general
existence of the OPEC alliance will be questioned."
Members of the Organization of the Petroleum Exporting
Countries, Russia and others, a group known as OPEC+, will
consider extending existing cuts for three to four months or
increasing output gradually from January, OPEC+ sources said.
OPEC+ had been due to ease its existing production cuts by 2
million barrels per day (bpd) from January.
Hussein Sayed, analyst at FXTM, said fuel demand had recovered
in Asia but not in Europe and the Americas, presenting OPEC+
with a "challenging choice on whether to delay or bring back
more oil to the market."
Goldman Sachs said the surge in COVID-19 cases in the winter
would not prevent the oil market rebalancing as a result of
vaccine progress, saying it saw Brent rising to $65 in 2021.
A Reuters poll of 40 economists and analysts forecast Brent
would average $49.35 a barrel next year.
Brent and WTI are still set to rise more than 20% in November,
the strongest monthly gains since May, boosted by hopes that
three promising vaccines could support economic recovery and
lift fuel demand.
Supporting the demand outlook, China expanded factory activity
at its fastest in more than three years in November.
Prices also found some support after Moderna Inc said it will
apply for U.S. and European emergency authorization of its
COVID-19 vaccine on Monday based on full results from a
late-stage study showing its vaccine was 94.1% effective with no
serious safety concerns.
(Graphic: Brent and WTI price forecast for 2021 https://graphics.reuters.com/OIL-PRICES/azgvozdjopd/chart.png)
(Reporting by Bozorgmehr Sharafedin in London, additional
reporting by Florence Tan and Koustav Samanta in Singapore;
Editing by Kirsten Donovan)
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