SINGAPORE: Oil prices fell for a third day on Thursday amid anxiety that supply may rise after the collapse this week of talks among major producers, potentially causing the current output agreement to be abandoned.
Brent crude oil futures were down 43 cents, or 0.6%, at $73 a barrel by 0158 GMT. US West Texas Intermediate futures were down 51 cents, or 0.7%, at $71.69 a barrel.
Brent prices have fallen about 5.3% since Monday s close after talks between the Organization of the Petroleum Exporting Countries and its allies, including Russia, known as OPEC+, fell apart when de facto leader Saudi Arabia refused demands from the United Arab Emirates to raise its output under the group s supply cut agreement.
BBC News
By Sameer Hashmi
image copyrightReuters
image captionCracks have gradually appeared in the alliance forged by Saudi Arabia and Abu Dhabi s crown princes
A bitter public rift between the United Arab Emirates and Saudi Arabia over oil production quotas this week caused talks between the world s biggest oil-producing nations to be abandoned and left energy markets in limbo, pushing oil prices to a six-year high.
The 23 nations in Opec+, which comprises the Organization of the Petroleum Exporting Countries cartel and allied producers like Russia, had to postpone their negotiations indefinitely, raising fears about its stability of a group that has deftly handled supplies over the past 18 months to cope with the coronavirus-related global economic crisis.
By Laila Kearney NEW YORK (Reuters) -Oil prices fell more than $1 a barrel on Wednesday in another seesaw trading session, as investors feared what this week s collapse in OPEC+ talks meant for worldwide production. Crude markets have been volatile over the last two days following the breakdown of discussions between major oil producers Saudi Arabia and United Arab Emirates. Brent crude settled at $73.43 a barrel, falling $1.10, or 1.5%. U.S. West Texas Intermediate settled at $72.20 a barrel, shedding $1.17 or 1.6%. Both benchmarks rallied more than $1 a barrel earlier in the session, similar to Tuesday s action. The Organization of the Petroleum Exporting Countries and its allies, including Russia, known as OPEC+, have restrained supply for more than a year since demand crashed during the coronavirus pandemic.
IT IS RARE for spats about oil supply to break out between Saudi Arabia and the United Arab Emirates (UAE). The countries’ views on output usually align. Traders and analysts regard them, along with Kuwait, as the core of the Organisation of the Petroleum Exporting Countries (OPEC). So eyebrows were raised in early July when Suhail Al Mazrouei, the UAE s energy minister, told reporters that OPEC s quotas were “totally unfair”. A further surprise came on July 5th when meetings between the cartel and its allies (notably Russia), together known as OPEC+, were abandoned because of the disagreement. The price of the benchmark Brent crude rose above $77 a barrel for the first time in more than two years, before dropping back below $75. (The price of American crude briefly hit a six-year high.)
July 7, 2021
On July 5, the Organization of the Petroleum Exporting Countries (OPEC) and allied producers canceled a planned meeting, leaving the group without a clear plan to raise output after August 1. An internal rift is raising questions over the group’s cohesion and market messaging, at a time when demand is growing, and OPEC states want to take advantage of higher prices.
Q1: What happened at the OPEC meeting?
A1: OPEC and the broader OPEC+ group failed last week to agree on a new plan to raise production. For months, the group has been unwinding its largest-ever production cut, instituted in April 2020 at the peak of the Covid-19 oil demand shock. OPEC+ had agreed to add 2 million barrels per day (b/d) to the market from April to July, and Saudi Arabia has also been tapering its unilateral 1 million b/d cut. The group needed to agree on a production plan beginning August 1 and planned to add more barrels into a market showing relatively robust demand. (Brent crude s