Oil Surges as OPEC+ Calls Off Meeting without Decision

Oil prices surged on Monday, for the fifth consecutive session, with markets anticipating the outcomes of the ongoing OPEC+ negotiations regarding output cuts.

Brent crude futures for September delivery gained 99 cents, or 1.30%, to close at $77.16 per barrel, to log a new highest closing level since October 29, 2018.

This marked the biggest gain for the global benchmark crude most-active contract since June 21.

Meanwhile, the U.S. West Texas Intermediate crude futures traded higher by $1.20, or 1.6%, at $76.36 a barrel on the Independence Day U.S. holiday.

The ministerial summit between members of the Organization of Petroleum Exporting Countries (OPEC) and other major producers, forming together an alliance known as OPEC+, delayed once again talks.

A decision on output policy for August and beyond was originally expected last Wednesday then the summit was moved to Thursday and continued with members agreeing to continue talks today, but no agreement has been reached yet, as per recent media reports.

The summit discussed easing production cuts by about 400,000 barrels a day, to raise output by about 2 million b/d between August and December.

A proposal to extend the remaining output cuts until the end of 2022 is reportedly the focal point of disagreement.

The UAE has opposed the new proposal, despite unconditional support for increasing production.

The Emirati Minister of Energy and Infrastructure Suhail Al-Mazrouei recently told CNBC that it was not a good deal for the UAE, rejecting the plan to link raising output with extending and the current agreement and the conditions associated with it, believing it is better to discuss this matter at a later meeting.

This month OPEC+ continues to gradually ease the pandemic-related output cuts, as agreed in April.