OPEN APP
Home / Markets / Commodities /  OPEC+ meeting on Aug. 3: Oil prices rise on tight supply

OPEC+ meeting on Aug. 3: Oil prices rise on tight supply

OPEC+ sources said the group will consider keeping oil output unchanged for September, but two OPEC+ sources also claimed a modest increase would be discussed. (AFP)Premium
OPEC+ sources said the group will consider keeping oil output unchanged for September, but two OPEC+ sources also claimed a modest increase would be discussed. (AFP)

The next meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together called OPEC+, on Aug. 3 will be key as the producers have now unwound the record 9.7 million barrels per day (bpd) supply cut they agreed in April 2020

Listen to this article

Oil prices gained about $1 in early trade on Friday, lifted by supply concerns and a weaker U.S. dollar as attention turns to what OPEC and allies including Russia agree at a meeting next week marking the end of their 2020 output reduction pact.

U.S. West Texas Intermediate (WTI) crude futures for September delivery rose $1.09, or 1.1%, to $97.51 a barrel by 0041 GMT, reversing losses from the previous session when sentiment was hit by fears of a recession in the United States.

Brent crude futures for September settlement, due to expire on Friday, rose 86 cents, or 0.8%, to $108.00 a barrel. The more active October contract climbed 87 cents, or 0.9%, to $102.70.

Brent is on course to climb nearly 5% for the week in its second straight weekly gain, while WTI is on track for a nearly 3% rise for the week, recouping the previous week's losses.

"Oil prices have little chance of (posting) deep losses on the back of a weak U.S. dollar and the ongoing supply crunch," said CMC Markets analyst Tina Teng.

Oil typically rises when the dollar falls as a weaker dollar makes crude cheaper for buyers holding other currencies.

The next meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together called OPEC+, on Aug. 3 will be key as the producers have now unwound the record 9.7 million barrels per day (bpd) supply cut they agreed in April 2020, when the COVID-19 pandemic slammed demand.

OPEC+ sources said the group will consider keeping oil output unchanged for September, but two OPEC+ sources also told Reuters a modest increase would be discussed.

A decision not to raise output would disappoint the United States after U.S. President Joe Biden visited Saudi Arabia this month hoping to strike a deal on oil production.

A senior U.S. administration official said on Thursday the government was optimistic about the OPEC+ meeting, and said extra supply would help stabilise the market.

Analysts, however, said it would be difficult for OPEC+ to boost supply much given that many producers are struggling to meet their production quotas due to a lack of investment in oil fields.

"OPEC production is constrained, though supplies are stabilising in Libya and Ecuador. Under-investment in many member countries will keep production constrained," ANZ Research analysts said.


This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

Catch all the Commodity News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Recommended For You

×
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout