The price of oil slipped almost four percent on Tuesday as concerns grow that major oil producers won’t agree on a global output deal during the OPEC meeting on November 30.
Brent crude was down 3.21 percent, trading at $46.69 per barrel as of 2:50pm GMT. West Texas Intermediate dropped by 3.29 percent to $45.53 a barrel.
According to Reuters sources, key OPEC members continue to disagree over details of the agreement. Iran and Iraq are reportedly still resisting pressure from Saudi Arabia to curtail oil production.
Earlier this month, OPEC's biggest producer Saudi Arabia offered to cut its output by 500,000 barrels per day (bpd). The cartel offered Iran a compromise to cap output at current production of around 3.6-3.7 million bpd. Tehran, however, insists on restoring production hit by sanctions and would accept a freeze at between 4.0 and 4.2 million bpd.
"The revival of Iran’s lost share in the oil market is the national will and demand of the Iranian people," the Iranian Shana news agency quoted the country's oil minister Bijan Zanganeh as saying. The minister is expected in Vienna later on Tuesday.
Iraq has also been pressing for higher output limits, claiming it needs more money to fight Islamic State (IS, formerly ISIL/ISIS). Experts say Baghdad would have to compensate international oil companies for restrictions placed on their production if the OPEC deal is agreed.
In September OPEC decided to cut output to around 32.5 to 33 million barrels per day versus the current 33.64 million barrels. The move aims to buck up oil prices that have more than halved since 2014.
Analysts say oil prices will stay volatile this week, no matter what the Organization of the Petroleum Exporting Countries decides at the meeting.
"Volatility is set to be high in the oil market in the days ahead," analysts at Barclays said.
Oil prices will quickly move above $50 per barrel if the output deal is agreed, according to analysts, or may fall to $40 if it's not.
Saudi Energy Minister Khalid al-Falih said oil markets would rebalance even without an output limiting pact.