Oil Prices Volatile as Surprise OPEC+ Cutbacks Shake Markets

Oil prices fell after OPEC delayed its meeting to determine crude oil supply output, leading to speculation of potential surprise cutbacks not anticipated by the markets. While traders had expected production cuts to stabilize prices, energy expert Anas Alhajji believes that Saudi Arabia may announce additional voluntary cuts to bring the futures market into backwardation, where current prices are higher than future prices. This would incentivize investors and companies to store oil and reduce inventories. The virtual nature of the meeting and its timing with the COP28 climate summit suggest that OPEC+ members have already agreed on quotas, making the meeting a formality.