Oil Prices Push Higher After OPEC+ Talks Called Off

Oil prices extended gains on Tuesday to reach some of their highest levels since 2018 after the closely-followed OPEC+ discussions were called off.

The discontinuation of the OPEC+ talks heightened expectations that supplies will tighten further just as global fuel demand recovers from a COVID-19-induced slump.

Brent crude climbed 18 cents or 0.2% to stand at $77.34 a barrel by 06:42 WAT, after gaining 1.3% on Monday. An earlier session peak of $77.61 was its highest level since October 29, 2018.

U.S. West Texas Intermediate (WTI) crude futures were at $76.57 a barrel, up by $1.41 or 1.9% from Friday’s close. There were no settlements on Monday as it was a U.S. holiday to mark Independence Day. It however hit $76.77 a barrel earlier on Tuesday, just shy of an October 2018 peak of $76.90.

Ministers of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, abandoned oil output talks and set no new date to resume them, after clashing last week when the United Arab Emirates rejected a proposed eight-month extension to output curbs.

Iraqi Oil Minister Ihsan Abdul Jabbar said on Monday that his country is committed to the current agreement with OPEC and its allies and does not want to see oil prices soaring above current levels to achieve stability. He also said he hopes that in 10 days there could be a date for the next meeting.

OPEC+ agreed on record output cuts in 2020 to cope with a COVID 19-induced price crash. The producers have been gradually easing the output restrictions, but a plan on Friday to lift output by about 2 million barrels per day (bpd) from August to December 2021 and to extend the pact on a series of gradual output shifts to the end of 2022 was blocked.