Oil prices fall as OPEC+ resume talks on extending production cuts

Oil prices dropped on Thursday as major producers fought over the need for extending record output cuts that were imposed at the beginning of the COVID-19 pandemic.

Brent crude fell 0.3%, or 15 cents, at $48.10 per barrel following a 1.8% gain on Wednesday. U.S. oil slid 0.4%, or 17 cents, at $45.11 per barrel after rising 1.6% in the last session. 

OPEC and its allies are resuming talks on Thursday to agree on output policies for 2021. Investors have been expecting the group to extend the existing 7.7 million bpd cut, or 8% of global supply, at least until March 2021.

However, when positive news about COVID-19 vaccines prompted a rally in oil prices in November, producers questioned the need for tightening oil policies. Among those that supported this notion was OPEC leader Saudi Arabia.

Meanwhile, U.S. crude inventories dropped last week, while gasoline and distillate stockpiles gained sharply. Oil stocks sank by 679,000 barrels in the week ended Nov. 27. Gasoline inventories rose by 3.5 million barrels and distillate inventories were up by 3.2 million barrels.