Oil prices hit multi-year highs after OPEC + talks lead to no production deal – .

Oil prices hit multi-year highs after OPEC + talks lead to no production deal – .

Oil pumping jacks, also known as “nodding donkeys”, operate in an oil field near Almetyevsk, Tatarstan, Russia on Wednesday March 11, 2020.
Andreï Rudakov | Bloomberg | Getty Images
Oil hit its highest level in nearly three years on Monday after talks between OPEC and its oil-producing allies were postponed indefinitely as the group failed to reach an agreement on production policy for August and beyond.
Futures on West Texas Intermediate crude, the benchmark of U.S. oil, rose 1.56%, or $ 1.17, to $ 76.33 per barrel, its highest level since October 2018. International benchmark Brent crude rose 1.2%, or 93 cents, to $ 77.10 a barrel.

Discussions began last week between OPEC and its allies, known as OPEC +, as the energy alliance sought to establish a production policy for the remainder of the year. The group voted Friday on a proposal that would have put 400,000 barrels a day back on the market every August to December, or an additional 2 million barrels a day by the end of the year. Members also offered to extend production cuts until the end of 2022.

The United Arab Emirates rejected the proposals, however, and discussions stretched from Thursday to Friday as the group tried to reach consensus. Initially, talks were scheduled to resume on Monday, but were eventually called off.

“The date of the next meeting will be decided in due course,” OPEC Secretary General Mohammad Barkindo said in a statement.

OPEC + took historic action in April 2020 and cut nearly 10 million barrels per day of production in a bid to support prices as demand for petroleum products plummeted. Since then, the group has slowly put barrels back on the market, while meeting almost every month to discuss production policy.

“For us, it was not a good deal,” UAE Energy and Infrastructure Minister Suhail Al Mazrouei told CNBC on Sunday. He added that the country would support an increase in supply in the short term, but wants better terms if the policy is to be extended until 2022.
Oil’s meteoric rally this year – WTI gained 57% in 2021 – meant that ahead of last week’s meeting, many Wall Street analysts expected the group to increase production in a bid to curb soaring prices.

“In the absence of an increase in production, the coming growth in demand is expected to cause global energy markets to tighten at an even faster rate than expected,” TD Securities analysts wrote in a report. note to customers.

“This stalemate will result in a temporary and significantly larger than expected deficit, which should fuel even higher prices for now. The summer oil price breakout is expected to accelerate rapidly, ”the company added.

– CNBC’s Sam Meredith contributed reporting.

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