Oil jumped to its highest level in nearly three years on Monday after talks between OPEC and its oil-producing allies were postponed indefinitely, with the group failing to reach an agreement on production policy for August and beyond.
West Texas Intermediate crude futures, the U.S. oil benchmark, advanced 1.56%, or $1.17, to $76.33 per barrel, its highest level since October 2018.
International benchmark Brent crude rose 1.2%, or 93 cents, to $77.10 per barrel.
Discussions began last week between OPEC and its allies, known as OPEC+, as the energy alliance sought to establish output policy for the remainder of the year. The group on Friday voted on a proposal that would have returned 400,000 barrels per day to the market each month from August through December, resulting in an additional 2 million barrels per day by the end of the year. Members also proposed extending the output cuts through the end of 2022.
The United Arab Emirates rejected these proposals, however, and talks stretched from Thursday to Friday as the group tried to reach a consensus. Initially, discussions were set to resume on Monday but were ultimately called off.
OPEC+ crisis talks abandoned as Saudi Arabia and the UAE remain at loggerheads over oil output
On Monday, OPEC+ sources said the UAE’s position was unchanged. They said a ministerial panel chaired by Saudi Arabia and Russia, the Joint Ministerial Monitoring Committtee, needed more time to discuss the issue.
Decisions in OPEC+, which groups the Organization of the Petroleum Exporting Countries with Russia and other big producers, must be unanimous.
The dispute reflects a growing divergence between Saudi Arabia and the UAE.
Reference: CNBC, Reuters
Thai
Eng