By Dan Molinski and Georgi Kantchev
Oil prices fell sharply Thursday after OPEC delayed a decision on cutting crude output, while a sliding stock market drove investors away from riskier assets across the board.
West Texas Intermediate futures dropped 3.3% to $51.17 a barrel on the New York Mercantile Exchange. The U.S. benchmark crude price briefly fell more than 5% to an intraday low of $50.08. Brent, the global benchmark, was 3.3% lower at $59.51 a barrel.
The Organization of the Petroleum Exporting Countries concluded Thursday's meeting in Vienna with an agreement that production cuts are needed but didn't set a level for the cuts. OPEC is expected to discuss production levels with its allies, led by Russia, on Friday.
Prices tumbled Thursday after Saudi Oil Minister Khalid al-Falih, while leaving the OPEC meeting, said he was "not confident" OPEC and its allies will reach an agreement on reducing oil production.
If no deal is reached, crude "prices would fall in the foreseeable future," said Tamas Varga, an oil analyst at brokerage PVM.
OPEC delegates said they are considering output cuts of as much as 1 million barrels a day. To some analysts and investors, that level won't be enough to convince investors and analysts that the group will be able to balance the market.
OPEC and Russia have "got to announce cuts of at least 1.3 [million barrels a day] to 1.5 to get any sort of bounce in prices," said Kyle Cooper, a consultant for ION Energy.
The group is under pressure to support prices after a more than 30% tumble from the multiyear highs reached in October. Thursday's selloff extends a rocky stretch for energy markets over the past few weeks. Concerns about rising global crude supply, combined with anxieties about the health of global economic growth -- and its implications for oil demand -- have sent crude prices sharply lower.
A slide in stock markets on Thursday added to concerns among investors. The arrest of a high-profile Chinese executive in Canada hit share prices from Asia, Europe to the U.S. The news comes at a vulnerable time for global trade, after Beijing reiterated its intent to follow through on promises aimed at easing trade hostilities with the U.S.
"Oil prices are under pressure, somewhat reflecting the sell-off in stocks, somewhat reflecting skepticism OPEC will come through with sufficient production cuts," said Rob Haworth, a senior investment strategist, at U.S. Bank Wealth Management. "For now we believe prices remain under pressure, even if OPEC can come through with production cuts."
The bearish news out of Vienna overshadowed a report from the U.S. Energy Information Administration on Thursday that showed crude oil stockpiles fell by 7.3 million barrels last week, ending a 10-week streak of increases.
"The report was considered quite bullish," said ION's Mr. Cooper.
There also remain a number of stumbling blocks for OPEC to reach a decision. Iran, OPEC's third-biggest producer, said Thursday that it can't participate in any cuts until the U.S. lifts sanctions against the country. The country's oil minister, Bijan Zangeneh, said Thursday that oil prices between $60 and $70 a barrel would be acceptable.
President Trump, meanwhile, has voiced opposition to an agreement that would reduce crude production.
"Hopefully OPEC will be keeping oil flows as is, not restricted. The world does not want to see, or need, higher oil prices!" Mr. Trump tweeted Wednesday.
Write to Dan Molinski at Dan.Molinski@wsj.com and Georgi Kantchev at firstname.lastname@example.org
(END) Dow Jones Newswires
December 06, 2018 13:51 ET (18:51 GMT)
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