Adedapo Adesanya
By Adedapo Adesanya
The Organisation of the Petroleum Exporting Countries and allies (OPEC+) postponed its meeting to decide the return of more barrels to the market and this made oil prices to close mixed on Friday.
While the Brent crude futures traded higher by 0.33 per cent or 0.44 per cent at $76.17 per barrel, the United States West Texas Intermediate futures closed lower by 7 cents to $75.16 per barrel.
OPEC and non-OPEC ministers finished their delayed meeting without a resolution on Friday and will meet again on Monday on oil output policy. The United Arab Emirates (UAE) delayed a deal as it demanded a higher production quota.
On Thursday, before the meeting of the OPEC+ producers was postponed for the next day, prices rose on reports that Russia and Saudi Arabia had reached a preliminary deal to add more barrels to global supply.
The size of the proposed production increase was lower than most analysts had expected, coming in at an average monthly addition of 400,000 barrels per day, whereas expectations had been for 500,000 barrels per day.
Since Saudi Arabia and Russia had agreed, most of the allies were expected to accept, except for the UAE, which disagreed with easing cuts and sought an extension to their quota till the end of next year.
The Middle East giant opposed these plans on the grounds that OPEC+ should change the baseline for cuts, effectively raising its production quota.
Analysts warned that if the alliance doesn’t reach a decision on Monday, it could be fatal for the oil market, bringing back a fate that happened last year when prices crashed to subzero levels.
The market also assessed fuel demand concerns in parts of Asia where cases of the highly contagious COVID-19 Delta variant are surging.
The highly contagious Delta variant of the coronavirus is surging through Asia this week, with record numbers of infections in Australia and South Korea, prompting some countries to tighten curbs and others to hasten vaccination.
The variant, first detected in India in December last year, has spread to about 100 countries and the World Health Organisation (WHO) warned recently that it could soon become the dominant form of the virus. It is also driving a spike in cases in Japan.
