Oil prices fall after OPEC+ extends supply talks after UAE seeks higher output hike

Oil prices edged lower on Friday after OPEC+ ministers delayed an output policy meeting, with sources saying the United Arab Emirates had balked at proposals that included raising supply by 2 million barrels per day (bpd) by the end of the year.

Brent crude futures were down 34 cents at $75.50 a barrel by 1421 GMT after rising 1.6 percent on Thursday.

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US West Texas Intermediate (WTI) crude futures were down 52 cents at $74.71, having jumped 2.4 percent on Thursday to close at their highest since October 2018.

Both benchmark contracts had gained on Thursday after OPEC+ sources said the group aimed to hike output by less than expected and retreated when UAE opposed the proposals, which also included extending the pact on output to the end of 2022.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, are meeting again on Friday to discuss the plans after UAE opposed the proposals, saying it wanted its quota to be higher, sources said.

“The UAE’s nod is needed to shape a common policy for the rest of the year that everyone will adhere to,” said Louise Dickson, oil markets analyst at Rystad Energy

“If the alliance cracks and breaks up ... the oil market could plunge into a very similar price crash witnessed when Russia 'left' OPEC+ at the March 2020 meeting and triggered a price war.”

WTI was on track for a 0.9 percent rise for the week, with the US crude market expected to tighten as refinery runs pick up to meet recovering gasoline demand.

Brent was heading for a 0.9 percent fall on the week, reflecting concerns about fuel demand in parts of Asia where cases of the highly contagious COVID-19 Delta variant are surging.

Citi analysts said they did not expect WTI to climb to a premium to Brent because they expected US oil output to pick up at the end of 2021 and grow further in 2022.

Read more: OPEC+ panel sees risk of oil glut after April 2022, report says