Oil remains up, hangs on around $75 despite OPEC+ deal delay
Oil remained up on Friday morning in Asia despite a disagreement within the Organization of the Petroleum Exporting Countries and allies (OPEC+) slowed down a decision on output levels, which could cause an inflationary spike in prices if left unresolved.
Brent oil futures climbed up 0.30% to $76.07 by 10:48 PM ET (2:48 AM GMT) and WTI futures rose 0.36% to $75.50.
The United Arab Emirates put the brakes on a deal at the last minute, forcing the OPEC+ to postpone its decision on monthly production. The impasse could end with the alliance not increasing the output altogether and falling back on previous terms that asked for production to remain as it is until April 2022.
Before the standoff, the group appeared to agree in principle to boost output by 400,000 barrels a day each month from August until December. The OPEC+ ministers will reconvene on Friday as the current outcome leaves the market in uncertainty and damages the alliance’s reputation, following the previous year’s Saudi Arabian-Russian price war.
In the oil futures curve, the market structure picked up as timespreads sank deeper into backwardation. On Thursday, the three nearest timepreads on the WTI curve hit $1 a barrel, signifying the market’s increasing fears about supply tightness.