OPEC+ postpones meeting as producers at odds over policy
Oil prices rallied again today after OPEC+ postponed a meeting of members' ministers without fixing a new date, Reuters and other media outlets have reported.
The postponement comes after the group of oil producers failed to agree on production policy for August during talks last week. Brent was up 1.3% at $77.15/b as of press time on July 5, while WTI rose 1.5% to $76.3/b.
The oil cartel voted on July 2 on a proposal to ramp up oil supply by around 2mn barrels/day between August and the end of the year in 400,000 b/d monthly instalments. But the UAE has opposed the plan, as it is seeking to raise its baseline production from 3.168mn b/d currently to 3.84mn b/d, according to Reuters.
"Postponing the meeting reveals that the objections that the UAE raised are not easy to brush off," Louise Dickson, oil markets analyst at Rystad Energy, commented. "It may take some convincing and some serious concessions from Saudi Arabia to reach a deal now, and these should only mean increasing output more than initially suggested going forward – if a deal is to be agreed among OPEC+."
Saudi Arabia and Russia, OPEC+'s two biggest producers, are also in disagreement, according to Reuters and others. Saudi Arabia, with an economy more heavily reliant on oil revenues, is urging output restraint amid ongoing uncertainty about the pandemic's path, while Russia is more eager to ramp up supply.