Oil Prices Trend Higher amidst OPEC+ Members Rebellion
Oil prices trend higher amidst the unresolved faceoff between key members of the Organization of Petroleum Exporting Countries and allies (OPEC+) group. According to market data, crude oil has recorded surprising fluctuations from the after-shock of the cancelled OPEC+ meeting that experts expect will lead to short-term impulsiveness.
Supporting the rally, U.S. crude-oil stockpiles are unanimously expected to decrease from the previous week in data due Thursday from the U.S. Energy Department.
Russia is leading efforts to close divisions between Saudi Arabia and the United Arab Emirates to help strike a deal to raise oil output in the coming months, according to a report.
International benchmark Brent crude was selling at $75.10 a barrel, a 0.76% increase after closing Tuesday at $74.53 a barrel.
American benchmark West Texas Intermediate (WTI) was at $74.03 per barrel at the same time, a 0.90% increase after it ended the previous session at $73.37 a barrel.
Price unpredictability came after major oil producers of the OPEC+ group called off their Monday ministerial meeting after postponing it twice last week over the objection of the United Arab Emirates (UAE) to the proposed production levels.
US investment bank Goldman Sachs, however, said oil prices would increase up to $80 a barrel this summer, keeping its previous forecast unchanged.
“While the threat of a new OPEC+ price war is no longer negligible, its negative price impact would be dampened by a global market starting in a 2.5 million barrel per day deficit and in need of an extra 5 million bpd in production by year-end to avoid critically low inventories,” Goldman said.
The dispute among OPEC+ members occurred after the UAE objected to the group’s plans to boost output by 400,000 bpd from August to December. The group also wants to prolong the term of its production cut agreement, which was inked in October 2018, from April to December 2022.
In the United States, gasoline stockpiles are expected to fall by 2.1 million barrels from the previous week, according to analysts. Estimates range from a decrease of 4.1 million barrels to an increase of 1 million barrels.
Stocks of distillates, which include heating oil and diesel, are expected to rise by 300,000 barrels from the previous week. Forecasts range from a decrease of 2 million barrels to an increase of 1.8 million barrels.
In a related development, a key market spread weighed on Asian demand for West African oil as offers remained largely steady and results were awaited for two Indian tenders.
Meanwhile, traders said lighter Nigerian crude grades like Bonny Light and Qua Iboe were likely to trade below a premium of $1 compared to dated Brent, down about 20 cents from last week.
Oil Prices Trend Higher amidst OPEC+ Members Rebellion
