LONDON: On Tuesday, oil prices hit multi-year highs after OPEC+ producers fought over plans to boost production to meet surging global demand. Brent crude touched a session high of US$77.84, a level not seen since October 2018, before losing steam and falling to US$76.91 a barrel at 1149 GMT, down 25 cents, or 0.3 percent.
WTI oil futures in the United States rose 75 cents, or 1%, to US$76.91, after reaching a high of US$76.98 earlier in the session, the highest since November 2014.
Ministers from OPEC+, which brings together producers from the Organization of Petroleum Exporting Countries (OPEC) with Russia and others, called off talks on Monday after failing to resolve internal disagreements.
There has been no announcement of a future meeting date.
The United Arab Emirates indicated it would agree to increased output but rejected a rival request to extend the current April deadline for curbs until the end of 2022.
Some OPEC+ sources anticipate that talks will continue this month and that the group would agree to pump more from August, while others feel that the current restrictions will remain in place.
After OPEC+ abandons discussions, global crude prices surge to their highest level since 2018. https://fingfx.thomsonreuters.com/gfx/ce/qzjpqxagzvx/GlobalOilPricesJul2021.png The failure of the discussions, according to Goldman Sachs, has added uncertainty to the group’s production route, but it maintains its forecast of a $80 per barrel Brent price and a modest increase in output early next year. “The tensions between both parties appear to be fading as they agree to ramp up output through the end of the year, despite the fact that the oil balances for 2022 remain highly unpredictable, making a pledge to any long-term commitment superfluous today,” the bank added.
According to a White House spokeswoman, the Biden administration is pressing for a compromise approach in the talks.
“We are not a party to these discussions,” the spokeswoman said, “but administration officials have been in contact with key capitals to promote a compromise approach that will allow proposed production increases to proceed.”
Iraqi Oil Minister Ihsan Abdul Jabbar said on Monday that his country does not want oil prices to rise above present levels, and that a date for a new OPEC+ meeting should be arranged within the next 10 days.
Saudi Arabia hiked the official selling prices of all crude grades it sells to Asia in August, indicating a tighter market, the country’s state oil company Aramco said on Tuesday.
(Yuka Obayashi contributed additional reporting from Tokyo; Jason Neely and Barbara Lewis edited the piece.)/n
