· Oil prices extend gains after OPEC+ talks called off
Oil prices extended gains to hit some of their highest levels since 2018 after OPEC+ discussions were called off, heightening expectations that supplies will tighten further just as global fuel demand recovers from a COVID-19-induced slump.
Brent crude climbed 18 cents or 0.2% to stand at $77.34 a barrel by 0542 GMT, after gaining 1.3% on Monday. An earlier session peak of $77.61 was its highest level since October 29, 2018.
U.S. West Texas Intermediate (WTI) crude futures were at $76.57 a barrel, up $1.41 or 1.9% from Friday's close. There were no settlements on Monday, a U.S. holiday to mark Independence Day.
It hit $76.77 a barrel earlier on Tuesday, just shy of an October 2018 peak of $76.90.
· Breakdown of oil output talks threatens OPEC+ unity, may trigger weaker oil prices, says strategist
The collapse of talks between OPEC and its allies highlights the risks of the group’s unity breaking down and renews concerns about a possible oversupply of oil, a commodity strategist told CNBC.
The energy alliance, referred to as OPEC+, was set to resume talks Monday, but discussions have been called off indefinitely. That comes after the group twice failed to reach a key deal on their oil output policy last week.
“I certainly think there are some risks that the market may be really sort of discounting at the moment and that is a breakdown of that unity,” Daniel Hynes, senior commodity strategist at ANZ, told CNBC on Tuesday.
“That has been I think by far the biggest advantage of this alliance over the past 18 months … the picture that it presents to the market around a coordinated and very compliant agreement which hasn’t really seen any producers expand outside of that,” he added.
Reference: Reuters, CNBC
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