Oil prices edged lower today 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 29 cents at $75.55 a barrel today after rising 1.6% yesterday.
US West Texas Intermediate (WTI) crude futures were down 28 cents at $74.95, having jumped 2.4% to close at their highest since October 2018 yesterday.
Both benchmark contracts had gained yesterday 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 today to discuss the plans after UAE opposed the proposals, saying it wanted its quota to be higher, sources said.
"If the impasse between the UAE and the rest of the OPEC+ contingent persists, then the July output agreement will automatically run throughout August by default," StoneX analyst Kevin Solomon said.
"This would be a troubling scenario for the global economy. The oil market would tighten at an even faster rate and prices could quickly exceed $80 a barrel, which would hamper global economic growth prospects through inflationary pressures," he added.
WTI was on track for a 1.2% 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 0.8% 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.