Oil Climbs 2% As OPEC+ Considers Output Hikes

Oil climbs 2% as OPEC+ considers output hikes, demand surges
Crude prices rose to their highest levels since 2018 on reports that OPEC+ had reached a tentative agreement to hike oil output but the deal now hangs in the balance after word came late Thursday that a key member objected to it.

OPEC+’s plan to ease output cuts was thrown in jeopardy on Thursday and the pact’s meeting pushed to Friday after a key member – the United Arab Emirates – blocked the deal.

OPEC+’s plan to ease output cuts was thrown in jeopardy on Thursday and the pact’s meeting pushed to Friday after a key member – the United Arab Emirates – blocked the deal.

Oil prices continued to climb on Thursday as press reports suggested that OPEC+ is considering a two-million-barrel-per-day (bpd) output hike from August through December – but the deal was thrown into disarray after the United Arab Emirates blocked a plan for an easing of cuts and their extension to the end of 2022.

Global benchmark Brent settled at $75.84 a barrel, up $1.22, or 1.6 percent while United States West Texas Intermediate (WTI) crude gained $1.76, or 2.4 percent, to settle at $75.23 a barrel.

During the session, both Brent and WTI reached their highest levels since October 2018.

OPEC+ ministers met on Thursday via video conference to consider a monthly increase of below 500,000 bpd, according to press reports.

“If OPEC+ does keep a conservative stance and increases its production in a cautious manner – and up to 500,000 bpd is definitely cautious – prices will be supported, as demand will easily absorb that,” Rystad Energy’s Oil Markets Analyst Louise Dickson wrote in a Thursday note.

The Organization of the Petroleum Exporting Countries and its allies, a grouping known as OPEC+, discussed loosening the taps to allow more barrels into the market as demand continues to recover after being plundered by the coronavirus pandemic last year.