Daily Times

The Organisation of the Petroleum Exporting Countries (OPEC) and allied producers will continue talks on increasing oil output on Monday (tomorrow) after the United Arab Emirates rejected a proposal aimed at settling the issue.

“The 18th OPEC and non-OPEC Ministerial Meeting will resume on Monday, 5 July 2021, at 15:00 (CEST) via videoconference,” said a one line statement issued on Thursday.

Earlier, negotiations between OPEC and its non-member partners stalled after the UAE rejected an output deal pushed by top producers Russia and Saudi Arabia.

The two countries proposed to increase output by 2 million barrels per day by the end of 2021, but their proposal regarding remaining production cuts prompted the UAE to reject the deal altogether. The UAE has called for a much higher production limit, which could upset the entire OPEC+ deal, essentially aimed at easing rising oil prices caused by growing demand.

OPEC+ initially cut crude output by almost 10 million bpd last year due to the drop in oil demand caused by the coronavirus pandemic. The current limit is around 5.8 million bpd. However, the plan was to lift production cuts when the crisis settles, presumably by the end of April 2022.

Oil prices narrowed their spread and rounded off the week higher as Opec+ adjourned the long-drawn out meeting over future production increases. Brent, the international benchmark, and West Texas Intermediate, the main US gauge, gained around 1 per cent during the trading week after bridging their spread and trading above $75 per barrel.

While WTI remained flat, settling at $75.16 per barrel, Brent, under which two thirds of global oil is traded, settled 0.44 percent higher at $76.17 per barrel on Friday.

The crude benchmarks rose to multiyear highs in June, with WTI gaining 9.2 percent during the month as it climbed to its highest level since October 2018. Growing demand for energy around the world as economies relax Covid-19 mobility restrictions has caused prices to rise about 50 per cent from the beginning of the year.