Oil prices were dropping as traders sold shares of the commodity in droves early Thursday, ahead of an expected price gouge by the Organization of Petroleum Exporting Countries (OPEC).
Profit-taking was behind the plummeting prices, as those with WTI and Brent in their portfolios sought to take advantage of a 15-month high for WTI prices, traders told CNBC. Brent crude, an international benchmark, reached a nearly 11-month high on Wednesday.
Decisions to sell WTI specifically also stemmed from the drop in U.S. crude stocks last week — by 5.2 million barrels, compared to expectations of a 2.7 million barrel increase — sending prices for the American commodity up to highs not seen in months, Reuters reported. The unexpected decline in inventories, possibly related to Hurricane Matthew’s tearing up the coast, was coupled with a decline in crude imports to the U.S. to 6.47 million barrels per day, the lowest influx since November, according to Reuters.
The collective profit-taking fueled forecasts of a bullish market ahead of OPEC’s Nov. 30 meeting, at which the 14-member cartel is expected to cap production to between 32.5 million and 33 million barrels per day. The group’s current output stands at a record total of 33.6 million barrels per day, according to Reuters.
On Wednesday, OPEC announced that its basket of crudes—a measure averaging oil prices from its 14 member states—rose about 1.7 percent to $49.06 from $48.24 between Tuesday, Oct. 18 and Wednesday, Oct. 19.
Still, many, including members of OPEC and leaders of its member countries, expressed hesitation toward such a sharp production cut. Russia, whose Energy Minister said earlier in October that the oil juggernaut was interested in joining OPEC in capping output, also appeared to waver.
After two years of prices in the $40-$50 range, when the cost per barrel stood at more than $100 in mid-2014, nations whose gross domestic products rely predominantly on oil production and have dealt with economic pains continue to seek relief via higher prices for the commodity.