Oil prices slipped again on Tuesday. The situation comes amid concerns over increased supply after leading producers postponed talks on production policy for 2021. In fact, the decision is highly anticipated by investors and also a lot of market participants.

The delay could extend production cuts due to the coronavirus pandemic that continues to weaken the fuel demand in a long-term situation. It is known that COVID-19 still controls several countries in the world. In fact, positive cases are always increasing every day.

Before, the updated news about some vaccines had a good impact on the market. However, those vaccines still need several final clinical tests which means that we have to wait for two or three months later until they are ready to be massively produced.

Opening trading for December, the Brent crude was down for about 20 cents. The decline was about 0.4% at $47.68. The condition comes after earlier falling by more than 1% on Monday. The same situation occurs in other oil commodities.

Market Data and Updates on OPEC+

West Texas Intermediate also reported down 27 cents or 0.6%. That is, WTI touched $45.07 a barrel after falling 0.4% in the previous session. However, both contracts rose back about 27% in November and became one of the strongest increases so far.

It said that the monthly increase was the largest since March this year. It can happen after the development of the COVID-19 vaccine which gives a strong hope about the economic recovery that can increase fuel demand.

OPEC+ decided to postpone production policy talks for next year until Thursday. This was relayed by three reliable sources to Reuters lately. Many then wondered why the oil organization decided so since their final decision is awaited by so many parties.

According to the news, the delay was forced because the major players were still in disagreement about how much oil they should pump amid the weak demand. Certainty is needed to maintain the stability of this commodity soon.

Previous Meetings Did Not Reach Consensus

That organization, including the Organization of the Petroleum Exporting Countries (OPEC), Russia, and other allies, had previously been scheduled to hold a meeting on Tuesday. It was especially after the discussions of the main ministers on Sunday could not reach a consensus.

Bob Yawger, director of energy futures at Mizuho Securities said he suspected that eventually OPEC+ would extend its production reduction program for three months. That possibility is the most likely. However, any deal would still require the approval of some manufacturers. 

This is primarily to approve bigger cuts in the future. The biggest possibility is that the barrels are allocated to the United Arab Emirates (UAE). Such a move would be essential to the balance of the agreement. However, a source said the shocking thing. 

Rumours About UAE's Stance

The source said the UAE had complicated the picture by hinting it would be willing to support a rollover of supply cuts only if there is a compliance of group members with increased cutting commitments. However, no official statement has been given on the matter until now.

OPEC plans to reduce its current production reduction by 2 million barrels per day (BPD). The moment will start from January next year, but with demand conditions still under pressure from the COVID-19 pandemic that is still sweeping the world.

Meanwhile, OPEC+ Organization is considering extending current cuts until the first months of next year or 2021. The position was reportedly backed by de facto OPEC leader Saudi Arabia, the US stated by a reliable source.

A poll conducted by Reuters of 40 economists and analysts estimated that the Brent oil commodity may reach $49.35 per barrel next year as its average value in the market. They predicted that oil prices would have problems maintaining the rally.