Crude rises on delay to OPEC talks
Crude oil prices rose Wednesday, boosted by uncertainty over the extent to which top producers will agree to increase supply to the market later this week.
By 6:55 AM ET, U.S. crude was up 1.1% at $73.77 a barrel, while Brent was up 0.8% at $74.87.
Ministers of the Organization of Petroleum Exporting Countries and its allies, a group known as OPEC+, delayed preliminary talks by one day to allow more time to resolve differences over production policy.
The group is widely expected to announce an increase in output for August with oil prices surging to two-year highs, gaining around 50% from the start of the year.
That said, the growth of Covid cases caused by the virulent delta variant is obviously causing differences in opinion over whether to allow higher production or to continue with the current cautious approach.
And even if OPEC+ does boost supply by more than expected, it will not reach inventories in time to alleviate the tight market, according to Goldman Sachs.
“Ultimately, much more OPEC+ supply will be needed to balance the oil market by 2022,” analysts at Goldman said, in a note.
Adding to the positive tone, the American Petroleum Institute reported late Tuesday that U.S. crude supplies fell 8.15 million barrels last week, which would be the largest inventory decline since January if confirmed by the U.S. Energy Information Administration later in the session.