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Oil prices escalate to six-year-high as OPEC+ talks postponed

By Shubhangi on Jul 06, 2021 | 05:36 AM IST

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Oil prices escalated to the highest in six years as the talks between OPEC and its oil-producing allies got postponed indefinitely.

Oil benchmark, West Texas Intermediate crude futures were trading at $76.98 on Tuesday—highest since November 2014. The gains were later erased and the contract for August stood at $75.13 per barrel.

Similarly, Brent crude touched its highest level since late 2018 but later erased gains and stood at $76.23 per barrel.

Last week, OPEC+ had started discussing output policy for the rest of the year. On Friday, a proposal was set forward which would have returned 400,000 barrels per day in the market from August through December.

The United Arab Emirates, though, rejected the proposal and the group was unable to reach a consensus. The meeting was set to resume on Monday but instead got postponed indefinitely.

“The date of the next meeting will be decided in due course,” OPEC Secretary General Mohammad Barkindo said in a statement.

In April 2020, OPEC+ decided to remove nearly 10 million barrels per day of production as the demand on petroleum-products nosedived due to the pandemic.

As countries reopen, the group has been working on slowing returning barrels to the market.

“For us, it wasn’t a good deal,” UAE Minister of Energy and Infrastructure Suhail Al Mazrouei said, reported CNBC. He added that the country would support a short-term increase in supply, but wants better terms if the policy is to be extended through 2022.

(With inputs from CNBC)

Picture Credits: CNBC

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