Crude Oil Slips as OPEC Members Discuss Output Levels

imageCommodities2 hours ago (Jul 02, 2021 14:23)

© Reuters.

By Peter Nurse — Crude oil prices edged lower Friday, with traders keeping a wary eye on events in Vienna as a group of top producers discuss future output levels.

By 9:15 AM ET (1315 GMT), U.S. crude was down 0.3% at $75.072 a barrel, after climbing above $75 during the previous session for the first time since 2018, while Brent was down 0.2% at $75.72.

U.S. Gasoline RBOB Futures were up 0.4% at $2.2765 a gallon.

The Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, has restarted discussions over the amount of oil to return to the market after having a preliminary agreement blocked Thursday.

The group appeared to have come to a preliminary agreement to boost output by 400,000 barrels a day each month from August to December on Thursday before the United Arab Emirates vetoed the arrangement following a disagreement over how the group measures its production cuts.

If Friday’s discussions don’t succeed, the group would continue with current production levels, which could leave the market having to cope with a huge supply deficit in the second half of the year.

That said, “the will of some members to stick to their quota under such a scenario would likely be weak, and there is the potential for supply to increase regardless,” said analysts at ING, in a research note.

After all, OPEC boosted oil production last month by the most in a year, rising by 855,000 barrels a day in June to 26.47 million a day, according to a Bloomberg survey.

Away from events in Vienna, traders will also keep an eye out for the weekly Baker Hughes oil rig count to see whether U.S. shale producers are adding rigs to try and boost production given these high oil prices.

Also expected later in the session will be the crude CFTC speculative net positioning data.

Crude Oil Slips as OPEC Members Discuss Output Levels

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