LONDON: Oil prices fell on Friday as OPEC+ ministers postponed a meeting on output policy, with sources claiming the United Arab Emirates had rejected suggestions to increase supply by 2 million barrels per day (bpd) by the end of the year. After climbing 1.6 percent on Thursday, Brent crude futures were down 29 cents at US$75.55 a barrel by 1218 GMT.
WTI crude futures in the United States were down 28 cents at US$74.95 after rising 2.4 percent on Thursday to settle at their highest level since October 2018.
Both benchmark contracts rose on Thursday as OPEC+ sources stated the group planned to increase output by less than expected, but fell back after the UAE objected to the suggestions, which included extending the output accord until the end of 2022.
The Organization of Petroleum Exporting Countries and Allies, or OPEC+, will meet again on Friday to review the plans after the UAE objected to the suggestions, claiming that its share should be increased, according to sources.
“If the deadlock between the UAE and the rest of the OPEC+ contingent continues, the July output agreement will run by default through August,” StoneX analyst Kevin Solomon said.
“For the global economy, this would be a worrying scenario. The oil market would tighten considerably more swiftly, and prices might quickly surpass US$80 per barrel, putting global economic development prospects at risk due to inflationary pressures.” WTI was on track to gain 1.2 percent this week, with the US crude market forecast to tighten as refinery operations increase to meet improving gasoline demand. Brent was set to drop 0.8% this week, owing to concerns about gasoline demand in parts of Asia where cases of the highly contagious COVID-19 Delta strain are on the rise. Citi analysts predicted that WTI would not rise to a premium to Brent because US oil output will pick up at the end of 2021 and continue to grow in 2022. (Sonali Paul contributed additional reporting; David Goodman and Edmund Blair edited the piece.)/n
