Oil Down, Investors Await Crucial OPEC+ Meeting

© Reuters.

By Gina Lee

AiVIF.com – Oil was down Monday morning in Asia, with investors on tenterhooks ahead of a crucial Organization of the Petroleum Exporting Countries (OPEC) and allies (OPEC+) meeting later in the day.

Brent oil futures inched down 0.07% to $76.12 by 12:25 AM ET (4:25 AM GMT), after falling to its first weekly decline in six during the previous week. WTI futures also inched down 0.07% to $75.11.

The latest meeting comes as the cartel voted to increase production by about 2 million barrels a day from August to December 2021, as well as extend the remaining output cuts to the end of 2022, on Friday.

However, the United Arab Emirates has raised objections to the vote results, in a rare public dispute that could see a price crash like the one that followed a Saudi Arabia-Russia price war in April 2020. National interests are also increasingly playing into the picture, with oil users wanting to see more supply in the market as their economies recover from COVID-19.

"This latest move raises the bar for the OPEC+ alliance, which has shown great unity that has ultimately helped rebalance the market following the collapse in demand," ANZ Research analysts said in a note.

"A break-up could result in a free-for-all that would likely lead to a collapse in prices,” the note added.

Saudi Arabia's energy minister Prince Abdulaziz bin Salman Al Saud called for "compromise and rationality" in a bid for unity ahead of Monday’s meeting.

"You have to balance addressing the current market situation with maintaining the ability to react to future developments... if everyone wants to raise production then there has to be an extension," he told local media, where he also highlighted uncertainty over the course of COVID-19 as well as production from Iran and Venezuela in particular.

Meanwhile, in the U.S., Baker Hughes Co said in its report on Friday that the number of oil and natural gas rigs was up by 5 to 475 in the week to Jul. 2, the most since April 2020. This early indicator of future output rose for the third week out of the past four.