LONDON: On Tuesday, oil prices fell, owing to profit-taking following multi-year highs hit when OPEC+ countries fought over plans to increase supply to meet rising global demand. By 1354 GMT, Brent crude was down US$1.30 a barrel, or 1.7 percent, at US$75.86, after hitting a session high of US$77.84, its best since October 2018.
West Texas Intermediate (WTI) oil futures in the United States fell 47 cents, or 0.6 percent, to US$74.69, after reaching a high of US$76.98 in 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 the group will continue talks this month and agree to pump more from August, while others believe the current restrictions will remain in place.
A Kremlin spokeswoman stated that Russian President Vladimir Putin has no imminent plans to meet with top OPEC+ officials, but that work on a decision on output policy is still underway.
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 talks, according to Goldman Sachs, has thrown the group’s production schedule into doubt. The bank maintained its forecast of an early next year Brent price of $80 per barrel and a modest increase in output.
“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 did not want oil prices to rise above present levels, and that he hoped a new OPEC+ meeting would be scheduled within 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 David Goodman edited the piece.)
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