Oil tumbles as US piles pressure on Opec+ for more barrels

Singapore

OIL fell as the US increased pressure on Opec+ to boost supplies and the dollar held gains before a key Federal Reserve meeting.

West Texas Intermediate sank 1.7 per cent after easing 0.2 per cent on Tuesday (Nov 2) as Brent also dropped. President Joseph Biden blamed the alliance for fuelling inflation ahead of its meeting on Thursday to set output policy. Separately, Secretary of State Antony Blinken pressed the United Arab Emirates for increased supply.

Later Wednesday, the Fed is expected to announce it will begin winding down the bond-buying programme put in place last year to combat the fall-out from the pandemic. Ahead of that move, the US dollar ticked higher on Tuesday, making commodities priced in the currency more expensive for overseas consumers.

Crude has soared in 2021 as demand rebounded, draining stockpiles. At the same time, the Organization of Petroleum Exporting Countries and its allies have restored supplies taken offline last year at a gradual pace. Despite the pressure from the US and other oil importers, the cartel is expected to stick to a plan to raise output by a modest 400,000 barrels a day at its meeting.

"Opec+ staying the course is largely baked in but the market will watch out for surprises," said Vandana Hari, founder of energy consultancy Vanda Insights. "Crude is likely to be skittish today and tomorrow," swinging with shifts in risk appetite and data including official U.S. crude stockpile figures, she said. BLOOMBERG