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Oil remains stable as OPEC + seeks to break out of supply stagnation By Reuters

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© Reuters. FILE PHOTO: A gas station employee prepares to refuel a car in Rome, Italy, on Jan. 4, 2012. REUTERS / Max Rossi / File photo

By Aaron Sheldrick

TOKYO (Reuters) – Oil prices were stable on Monday and investors and traders were waiting for crucial talks by OPEC + following a disagreement over production within the group that could lead to major producers increasing volumes to gain market share.

it rose 4 cents to $ 76.21 a barrel at 0558 GMT, after falling 1 cent last week, the first weekly drop in six. US oil also gained 4 cents, trading at $ 75.20 a barrel, after rising 1.5% last week, the sixth consecutive week of gains for the contract.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC +, voted on Friday to increase production by approximately 2 million barrels per day from August to December 2021 and extend the remaining production cuts until the end of 2022. but objections from the United Arab Emirates (UAE) prevented a deal.

It was a rare public disagreement among members of the group, with increasingly divergent national interests, which is affecting OPEC + policy as oil users want more crude as their economies recover from the pandemic of COVID-19.

“Failure to reach an agreement can provide a brief advantage to the market,” ING Economics said in a note.

“However, realistically, it could also signal the beginning of the end of the broader agreement and thus the risk of members starting to increase production,” ING said.

Saudi Arabia’s energy minister sought on Sunday to reject the UAE’s opposition to a proposed OPEC + deal, calling for “compromise and rationality” to obtain unanimity when the group meets again on Monday.

“You have to balance addressing the current market situation with maintaining the ability to react to future developments … if everyone wants to increase production, then there has to be an extension,” Prince Abdulaziz bin Salman told the Saudi-owned television channel. Al Arabiya.

He also highlighted the uncertainty about the course of the pandemic and the production of Iran and Venezuela.

In the United States, energy companies increased oil and rigs for a third week of the last four.

The number of oil and gas rigs, an early indicator of future production, rose by 5 to 475 in the week ending July 2, the most since April 2020, Baker Hughes Co said in its report on Friday.

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