Oil prices drop amid OPEC+ uncertainty

2021-07-08 05:25

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NEW YORK, July 7 (Xinhua) -- Oil prices fell on Wednesday as major oil-producing countries' failure to reach a deal on production policy stoked concerns over uncertainty.

The West Texas Intermediate for August delivery lost 1.17 U.S. dollars to settle at 72.20 U.S. dollars a barrel on the New York Mercantile Exchange. Brent crude for September delivery decreased 1.1 dollars to close at 73.43 dollars a barrel on the London ICE Futures Exchange.

Oil prices were quite volatile as investors awaited more clues after talks by the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, collapsed on Monday.

On Tuesday, the U.S. crude benchmark settled 2.38 percent lower after hitting a high in six years and a half, and Brent also turned lower after hitting its highest level since 2018.

"The failure of the production agreement is not necessarily good news for the oil price," Eugen Weinberg, energy analyst at Commerzbank Research, said in a note on Wednesday.

"Oil prices would probably only be driven up further if OPEC+ were to stick to its production cuts agreement, i.e. with oil production being raised only in July and then kept stable until April 2022," he said.

OPEC+ made deep output cuts last year as the pandemic hurt global fuel demand and is restoring production as economic recovery continues in most parts of the world.
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