Crude Oil Sheds 2 Percent on Wednesday as OPEC+ Standoff Weighs on Sentiment

Crude oil trades lower on Wednesday as uncertainty between oil giants, Saudi Arabia and the United Arab Emirates, spread through the commodity market.

Brent Crude oil, against which Nigerian oil is priced, declined by $1.48 or 2 percent to $73.05 a barrel at 3:37 pm Nigerian time on Wednesday.

While the U.S. West Texas Intermediate shed $1.72 or 2.3 percent to $71.65 a barrel.

The decline was caused by the uncertainty surrounding OPEC+ production cuts as oil investors feared a collapse in the cartel talks could increase global supply and put an end to the ongoing progress in the oil market.

Oil markets have experienced high volatility in the last two days due to the failure of Saudi Arabia and the United Arab Emirates to reach an agreement regarding production cuts and extensions.

The market has alternated between rallies and selloffs, a situation that left global oil investors unclear on what the OPEC+ standoff means for worldwide production.

According to John Kilduff, partner at Again Capital in New York, “There’s a growing sense that the OPEC disarray isn’t necessarily bullish for prices after all because the real risk is the whole thing falls apart, becomes a free for all, and a lot more oil potentially gets put on the market.”