Singapore: oil prices Negotiations between major producers held steady after two days of losses amid uncertainty over supplies this week collapsed, which could potentially lead to the abandonment of an existing production agreement.
Brent crude oil futures were up 2 cents at $73.45 a barrel by 0413 GMT, after having fallen as low as $72.93 earlier. US West Texas Intermediate futures were down 10 cents, or 0.1%, at $72.10 a barrel.
Brent prices have fallen by about 5% since Monday’s close following talks between the Organization of the Petroleum Exporting Countries and its allies including Russia, known as Russia. OPEC+, broke down when de facto leader Saudi Arabia rejected a demand from the United Arab Emirates to increase its production under the group’s supply cut agreement.
“The oil market is looking beyond the oil supply deficit in August and expects the OPEC+ agreement to collapse well before April 2022 when the agreement expires as other member countries seek further concessions to gain more market share,” Senior Edward Moya said. Market Analyst at OANDA.
OPEC+ has halted supply for more than a year since demand collapsed during the coronavirus pandemic.
The group is cutting production by about 6 million barrels per day (bpd) and was expected to increase supplies, but three days of meetings failed to close the split between Saudis and emirates.
Three OPEC+ sources said on Wednesday that Russia is trying to mediate between Saudi Arabia and the UAE to reach an agreement to increase oil production.
Prices got some support from a large drop in oil inventories in the United States.
Oil reserves in the world’s biggest oil user fell by 8 million barrels for the week ended July 2, according to two market sources, citing data from the American Petroleum Institute, by 4 million barrels by analysts in a Reuters poll. lower than expected. [API/S]
Government inventory data due Thursday was pushed back to Monday, a day after the US Fourth of July holiday. [EIA/S]
The Energy Information Administration (EIA) said Wednesday that the decline in US oil production is expected to be less this year, with output at 11.10 million bpd in 2021, down 210,000 bpd from 2020, compared to a 230,000 bpd drop in its previous forecast. .
However, with Japan, the world’s fourth-largest oil user, concerns over the coronavirus weighed on prices, amid a new wave of infections and South Korea’s highest-ever report for the Tokyo region to declare a state of emergency until August 22. ready for. Daily COVID-19 cases.
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