Oil prices surged as OPEC+ canceled the scheduled ministerial oil-producing country meeting on the 5th (local time). This is because hopes for an agreement on increasing production have disappeared at all.
Brent crude on the London ICE Futures Exchange surpassed $77 a barrel.
On the New York Mercantile Exchange, West Texas crude (WTI) closed at $76.34 a barrel, up 1.57% from the previous trading day. Price of WTI surpassed $75 for the first time since October 2018. It has risen more than 50 percent this year alone.
Brent crude rose 1.27 percent to $77.11 a barrel.
The OPEC+ ministerial oil-producing country meeting scheduled for this day was abruptly canceled. The meeting was reportedly canceled as the United Arab Emirates (UAE) disagreed with the agreement reached by other oil-producing countries.
According to CNBC, OPEC+ oil-producing countries voted on the 2nd to increase oil production by 400,000 barrels a day from August to December. It also proposed extending the current production cut plan to the end of next year, not until April next April.
However, the meeting ended without an agreement as the UAE opposed the proposals, and the meeting was scheduled to resume at 2 p.m. London time on the 5th.
But sources told Reuters the meeting was completely canceled after a two-hour delay.
Bloomberg News also said the meeting was canceled without an agreement, and OPEC+ did not schedule a further meeting.
UAE Energy Minister Suhail Almazruay told CNBC, “It is not a good deal for us,” and said the UAE is willing to support short-term production increases, but wants better conditions for extending them to the end of 2022.
The UAE has argued that in order to extend the deadline for easing production cuts by the end of 2022, production standards that determine the size of production cuts should also be reviewed.
OPEC+ decided to cut production by 9.7 million barrels per day in May last year in response to a decrease in demand caused by the covid-19 pandemic. Afterwards, the government agreed to gradually ease production cuts by April 2022.
OPEC+’s production cut is 5.8 million barrels per day due to gradual easing of production cuts.
