Oil futures: Crude retreats after OPEC+ cuts viewed as unconvincing

Quantum Commodity Intelligence – Crude oil futures Thursday were sharply lower despite OPEC+ seemingly agreeing to deeper cuts next year for next year, after reaching a last-minute deal after a week of tense negotiations. 

Feb24 ICE Brent futures were trading at $80.68/b (1920 GMT), compared to the day's high of $84.61 and Wednesday's settle of $82.88/b, while Jan24 last traded $82.76/b heading into the expiry.

At the same time, Jan24 NYMEX WTI was trading $75.77/b versus Wednesday's settle of $77.86/b.

As expected, Saudi Arabia will extend its 1 million bpd voluntary cut, along with further reductions from the rest of the group. 

Overall, additional cuts of up to 700,000 bpd have been flagged, although traders were less convinced as there was no formal agreement under the OPEC+ umbrella.

In the absence of a formal agreement, members will be responsible for announcing their own cuts, which traders said could bring compliance issues, although several countries declared their intended cuts in the hours following the meeting.  

Prices earlier found some support from ongoing loading delays on the Black Sea, which continued into a fourth day with high winds and big waves threatening to persist through the week, delaying loading at the port of Novorossiysk, where Russian and Kazakh crude oil and products are loaded.

Transport restrictions on the Black Sea remained in place on Wednesday, with approximately 2 million bpd of Russian and Kazakh crude and products obstructed from loading since the start of the week.

"The storm at Novorossiysk is still on, so we – as well as many others – are waiting for it to end… Before any resumed operations, which we're looking for, the SPMs and floating hoses will be inspected mandatory," a Caspian Pipeline Consortium (CPC) spokesperson told Quantum.