By Adedapo Adesanya
Oil fell on Thursday as the Organisation of the Petroleum Exporting Countries and allies (OPEC+) left the market wondering about the future output, causing the Brent crude to trade lower by $3.42 or 3 per cent to $114.81 per barrel and weakening the United States West Texas Intermediate (WTI) by $4.02 or $3.7 per cent to $105.76 per barrel.
The OPEC+ alliance confirmed it would only increase output in August as much as previously announced despite tight global supplies, but left the market wondering about future output in coming months.
The monthly meeting ended in a quick fashion on Thursday with producers agreeing to boost production by 648,000 barrels per day in August.
The full OPEC+ ministerial meeting was not expected to offer any surprise, with the majority of analysts predicting that the group would rubberstamp the quota increase that it had previously set for August. At that increase, the quota—set two years ago—would be completely rolled back.
The oil cartel signalled that it intends to stick together to provide support to the market, with consistent signals coming from the group over the last couple of months that the alliance with Russia would continue.
However, delegates revealed that there were no talks about September’s production plans ahead of its next gathering on August 3, when discussions about the month’s production plans would be heard.
Amid this, further disruptions to supply could limit price declines following a suspension of Libyan shipments from two eastern ports while Ecuador’s output fell because of ongoing protests.
In Norway, 74 offshore oil workers will go on strike from July 5, the Lederne trade union said on Thursday, likely shutting about 4 per cent of Norway’s oil production.
An economic slowdown could temper oil price spikes, analysts said, but they expect tight supply to outweigh concerns about demand.
Meanwhile, Russian Deputy Prime Minister Alexander Novak said that a possible import price cap imposed on Russian oil could push prices higher, in response to plans by the G7 to planning to impose a price cap.
