Oil prices experienced a sharp drop of over 1% in early trading on Thursday, extending the losses seen in the previous session. The decline came as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, postponed a crucial ministerial meeting. Market sentiments were further affected by concerns that oil producers might implement smaller output cuts than initially anticipated.

Brent futures fell by $1.09, or 1.31%, to $80.89 per barrel after suffering a 4% decline on Wednesday. Similarly, U.S. West Texas Intermediate crude dipped by 99 cents, or 1.31%, to $76.09 per barrel, following a 5% fall in the previous session. The Thanksgiving holiday in the United States contributed to the muted trading activity expected for the day.

OPEC+ surprised the market with its decision to delay the ministerial meeting until November 30. Originally scheduled for November 26, the meeting was supposed to address the issue of oil output cuts. Sources within OPEC+ revealed that producers were struggling to reach an agreement on output levels and potential reductions. However, three sources stated that the delay was connected to smaller African producers within the group, easing investor concerns.

The uncertainty surrounding OPEC+'s supply decisions arose at a time when data showed a significant increase in U.S. crude stocks. Last week, U.S. crude stocks surged by 8.7 million barrels, far surpassing the 1.16 million barrels that analysts had expected. In addition, the number of active U.S. oil rigs remained unchanged at 500 in the week ending November 22.

Adding to the mix of concerns, a pipeline leak in the Gulf of Mexico caused the shutdown of approximately 3% of crude oil production. The leak, which the U.S. Coast Guard reported on Wednesday, resulted in the closure of around 61,165 barrels of daily output.

Market analysts and investors will closely monitor the outcome of the delayed OPEC+ meeting and the potential implications it may have on oil supply and prices. The postponement, along with the heightened inventory levels and the Gulf of Mexico pipeline leak, is likely to contribute to ongoing market volatility in the coming days.