Oil prices gain traction amid a likely delay in OPEC+ supply cut, demand prospects

• Financial

On Thursday, both US and UK crude oil futures’ prices feathered up as much as 2 per cent after OPEC+ sources had unveiled that the 14-member Organization of Petroleum Exporting Countries alongside their Russia-backed allies could step back from an earlier proposal of an output hike of 0.4 million bpd between August and December this year, while a sharp shoot-up in global fuel demands following an ease of pandemic restrictions in major economies such as the US and EU, prodded Permian Basin acres holders to gamble on a $100 per barrel crude oil this year, sources familiar with the subject-matter had unveiled on condition of anonymity.

Nonetheless, both oil contracts had pared some of earlier gains after OPEC+ members had delayed their planned July 1 policy meet, while a press agency report had quoted one of the OPEC+ sources as saying that the meeting had been pushed back to Friday after UAE had blocked a plan to increase oil outputs immediately.

However, there also had been growing concerns that a rapid rise in delta variants across South-east Asia alongside Gulf states could lead to an uneven economic rebound.

Crude oil gains more than 2 per cent as OPEC+ policy meet pushes back to Friday

Citing statistics, in the day’s commodity market wind-down, UK crude rose 1.6 per cent to settle down at $75.84 a barrel, while US West Texas Intermediate crude oil futures gained as much as 2.4 per cent to wind up the day at $75.23 per barrel.

Both contracts had hit their highest levels since October 2018 earlier in the session. Meanwhile, citing that a number of Gulf states including the OPEC-kingpin Saudi alongside UAE would more likely to ballot in favour of trimming outputs aimed at covering up earlier losses, a partner at Again Capital in New York, John Kilduff said, “I firmly believe that in the near-term, OPEC+, led by Saudi Arabia, is looking to squeeze consuming countries and engender a higher price to make up for the damage done last year. ”