Fallout from OPECplus July 2021 Meeting

Oil & Gas
1031 VIEWS
Proshare - Facebook Proshare - Twitter Proshare - Linked In Proshare - WhatsApp
Proshare

Tuesday, July 06, 2021 / 08:49 AM / By United Capital Research / Header Image Credit: Twitter; @OPECSecretariat

 

OPEC and non-OPEC ministers ended their meeting without a resolution after a key member left the OPEC+ coalition marred in uncertainty. The group earlier postponed its meeting on oil output policy till Monday (5th July). The OPEC+ alliance had agreed in principle to boost supply from August 2021 from its current levels to meet expected rising demand in H2-2021. The current agreement OPEC+ agreement is scheduled to expire in April 2022.


Following reports of a potential supply glut in the market in 2022, some members had proposed extending the duration of cuts until the end of 2022 instead of Apr-2022. However, the UAE opposed these plans, putting the OPEC+ output agreement at risk. Oil prices were unperturbed by the news, rising slightly on Thursday before losing momentum on Friday.

 

The Brent crude futures traded at $76.03 a barrel, up to 0.2% for the session, while U.S West Texas Intermediate (WTI) futures settled marginally to close lower at $75.16 a barrel. We maintain our positive outlook, which is predicated on demand-led recovery in the second half of 2021.


However, potential downside risks remain. The highly infectious delta variant of Covid-19, which is already sending some countries back into partial lockdown and triggering a worrying rise in cases in other nations, threatens demand recovery.

 

The standoff between the UAE and the rest of the cartel could ultimately mean tighter restrictions on compliant members, leading to a squeeze in an already tight market, further boosting prices. On the other hand, a disorderly OPEC+ could lead to cheating on the output quotas, leading to excess supply from OPEC+ and a price weakness.


Proshare Nigeria Pvt. Ltd.


Related News

  1. Oil Prices Fall as OPECplus Struggles for Consensus - OIR 020721
  2. NNPC to Acquire 20 Percent Stake in Oil Refineries
  3. COVID Variant Threatens Oil Demand - OIR 290621
  4. Can Anything Halt This Oil Price Rally? - OIR 250621
  5. Investing in Marginal Fields - Key Considerations for Financiers
  6. Oil Prices Fall as OPECplus Looks to Boost Production - OIR 220621
  7. Is The Oil Rally Nearing Its End? - OIR 180621
  8. Legislative Analysis of Nigeria's Liquified Natural Gas Act And Business Opportunities
  9. Average Prices of PMS, AGO, HHK and Cooking Gas - May 2021
  10. President Buhari Inaugurates Construction of $10bn NLNG Train 7 Project
  11. Oil Prices Rise as Demand Outstrips Supply - OIR 150621

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.
READ MORE:
Related News
SCROLL TO TOP