(Bloomberg) -- Oil slid as lingering tension among OPEC producers highlighted the uncertainty surrounding a delay to the group’s planned output increase.Futures declined as much as 1.5% in New York on Tuesday, reversing an earlier gain. Informal talks will continue by phone after OPEC+ shifted its final meeting by two days to Thursday to allow for more time to reach a deal on production policy. Friction between Saudi Arabia and the United Arab Emirates prevented what was widely expected to be a routine agreement to delay an output increase scheduled for January.“Oil prices are coming under modest selling pressure this morning as traders and analysts grapple with the OPEC+ discord as well as first of month fund flows,” said Ryan Fitzmaurice, commodities strategist at Rabobank. “This setup is eerily familiar to the early March meeting that resulted in a short-lived price and volume war initiated by Saudi Arabia after no consensus could be reached on production quotas.”With cracks appearing in the OPEC+ alliance, Saudi Energy Minister Prince Abdulaziz bin Salman signaled his dissatisfaction by threatening to resign as co-chair of a committee that oversees the output deal. The eroding unity among the group comes at a time when the market may struggle to absorb more barrels, with demand still weak due to the pandemic.“With Brent spreads narrowly moving into backwardation over the last weeks, the market has discounted the near-term deficits that would materialize from an OPEC+ deal,” Bart Melek, the head of global commodity strategy at TD Securities, said in a note. That suggests that “failure to reach an agreement would be received particularly negatively.”OPEC+ is likely to agree on a face-saving compromise, with a short extension the probable outcome followed by a phased return of production, RBC Capital Markets analyst Helima Croft wrote in a report. If an agreement isn’t reached and cuts are eased as scheduled, Brent prices are at risk of dropping back toward $40 and the market could face an oversupply of as much as 2 million barrels a day next quarter, Wood Mackenzie Ltd. said.See also: OPEC+ Needs to Keep Covid-19 Mask On a Bit Longer: Liam DenningIn some parts of the world, demand appears to be stabilizing. An armada of around 20 tankers carrying U.S. crude will be heading to Asia this month. Plus, factory activity in some of North Asia’s biggest export-led economies rebounded in November.In the U.S., expectations are for a decline in domestic crude supplies last week, according to a Bloomberg survey. The industry-funded American Petroleum Institute reports its figures later Tuesday.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.