Oil Prices Fell as OPEC+ Fail to Agree on Production Level

Oil Prices Fell as OPEC+ Fail to Agree on Production Level

Oil prices fell on Tuesday over uncertainties due to the adjournment of the Organisation for the Oil Exporting Countries and allies (OPEC+) inconclusive meeting due to failure to agree on oil production level for members.

The meeting was summoned to iron out differences among member countries in their agreement of a production cut quota for February.

Though, the meeting is expected to resume later Tuesday.

But, market data shows that international benchmark Brent crude was trading at $50.84 per barrel.

This compared to Monday, marked a decrease of 0.49% after closing at $51.09 a barrel.

Also, American benchmark West Texas Intermediate (WTI) was at $47.45 per barrel at the same time for a 0.36% decrease after it ended the previous session at $47.62 a barrel.

The Oil cartel and allies, including Russia, a group known as OPEC+, failed to agree at Monday’s meeting on whether to keep the current 7.2 million barrels per day production level or increase the quota.

The group, however, will resume talks later on Tuesday.

Prices succumbed to downward pressure not only on the inconclusive OPEC meeting but lingering concerns over low demand.

The development which followed with the UK’s announcement of a new national lockdown that will start Wednesday and run until around mid-February to stem the soaring number of COVID-19 cases in the country.

Geopolitical risks also exerted pressure on oil prices when Iran’s Revolutionary Guards (IRGC) on Monday seized a South Korea-flagged oil tanker in the waters of the Persian Gulf for allegedly violating maritime environmental laws.

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The price of OPEC basket of thirteen crudes stood at $51.36 a barrel on Monday, compared with $50.24 the previous Thursday, according to OPEC Secretariat calculations.

The OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Djeno (Congo), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).

Oil Prices Fell as OPEC+ Fail to Agree on Production Level