# Oil slides from multi-year highs after OPEC cancels meeting
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-07-06
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: Oil Prices Slip as OPEC+ Talks Collapse Over Supply Disputes
Meta Description: Oil prices fall after OPEC+ producers cancel meeting over disagreements on boosting supply amidst rising global demand. Stay informed with Reuters.
URL: https://financedigest.com/oil-slides-from-multi-year-highs-after-opec-cancels-meetinghtml

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By Laura Sanicola

(Reuters) – Oil slipped on Tuesday, pulling back from its recent rally, after OPEC+ producers cancelled a meeting due to clashes over plans to increase supply to meet rising global demand.

Ministers from OPEC+, which groups producers from the Organization of the Petroleum Exporting Countries (OPEC) with Russia and others, abandoned talks on Monday as negotiations failed to close divisions.

Discussions dissolved after Saudi Arabia, the largest OPEC producer, and [United Arab Emirates were unable to agree](https://www.financedigest.com/vodafone-agrees-to-buy-masmovils-portugal-unit-nowo.html "Vodafone agrees to buy MasMovil’s Portugal unit Nowo") over the terms for increasing supply.

Initially, oil rallied on news of the breakdown in discussions, but [prices retreated as traders focused on the possibility that the strife will cause some national producers to open](https://www.financedigest.com/wall-street-seen-opening-higher-but-u-s-recession-priced-in.html "Wall Street seen opening higher but U.S. recession priced in") the taps and start exporting more barrels.

Brent crude slipped by $2.43 a barrel, or 3.2%, to $74.73 by 11:45 a.m. EDT (1535 GMT), after [hitting a session peak](https://www.financedigest.com/australia-covid-numbers-hit-a-peak-as-omicron-outbreak-strains-domestic-politics.html "Australia COVID numbers hit a peak as Omicron outbreak strains domestic politics") of $77.84, its highest since October 2018.

U.S. West Texas Intermediate (WTI) crude futures traded down $1.53, or 2%, to $73.63 after touching $76.98, its highest since November 2014.

The [market is concerned that the UAE will step](https://www.financedigest.com/the-binocular-microscope-market-to-step-up-the-innovative-digitization-ladder.html "The Binocular Microscope Market to step up the innovative digitization ladder") in and unilaterally add barrels and other people in OPEC will follow suit,” said Bob Yawger, director of energy futures at Mizuho.

The United Arab Emirates said it would go along with output increases but rejected a separate proposal to extend curbs to the end of 2022 from an existing April deadline.

Some OPEC+ sources said they still believed the group would resume discussions this [month and agree to pump more from August](https://www.financedigest.com/august-the-most-popular-month-to-start-a-holiday-home-search-reveals-portal.html "AUGUST THE MOST POPULAR MONTH TO START A HOLIDAY HOME SEARCH REVEALS PORTAL"), though others said current curbs might remain in place.

No date for further talks has been announced.

Analysts expect U.S. producers to start adding to [supply after months of subdued activity due to higher prices](https://www.financedigest.com/oil-prices-extend-gains-with-falling-supplies-in-focus.html "Oil prices extend gains with falling supplies in focus"). U.S. production is currently around 11 million bpd, meaning there is room for output to [increase before coming](https://www.financedigest.com/food-fiber-market-to-exhibit-increased-demand-in-the-coming-years.html "Food Fiber Market to Exhibit Increased Demand in the Coming Years") close to the U.S. [record of nearly](https://www.financedigest.com/demand-for-monolithic-ceramics-is-envisaged-to-record-an-impressive-cagr-of-nearly-7-through-2027.html "Demand for Monolithic Ceramics Is Envisaged to Record an Impressive CAGR of Nearly 7% through 2027") 13 million bpd reached in 2019.

Activity in the Permian Basin is getting frenetic,” said John Kilduff, [partner at Again Capital](https://www.financedigest.com/sequant-capital-partners-with-hitbtc-to-launch-a-dedicated-service-for-professional-cryptocurrency-traders.html "Sequant Capital partners with HitBTC to launch a dedicated service for professional cryptocurrency traders") LLC in New York.

![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/globaloilpricesjul2021-450x254-1736838221418-compressed.jpg)

Graphics: Global crude [prices push to their highest since 2018 after OPEC+](https://www.financedigest.com/oil-prices-rise-after-opec-keeps-output-steady-russian-price-cap-imposed.html "Oil prices rise after OPEC+ keeps output steady, Russian price cap imposed") abandons talks – https://fingfx.thomsonreuters.com/gfx/ce/qzjpqxagzvx/GlobalOilPricesJul2021.png

Goldman Sachs said the [collapse of the talks](https://www.financedigest.com/motor-racing-porsches-formula-one-plans-stall-as-red-bull-talks-collapse.html "Motor racing-Porsche’s Formula One plans stall as Red Bull talks collapse") had introduced uncertainty into OPEC’s production path. The [bank said it still saw Brent reaching $80 per barrel early next year](https://www.financedigest.com/four-years-of-open-banking-2022-may-be-the-best-year-yet.html "Four years of Open Banking: 2022 may be the best year yet ").

The differences between both parties seem surmountable as they agree on ramping-up [production into year-end with the still high uncertainty for 2022 oil](https://www.financedigest.com/best-paying-jobs-in-oil-and-gas-production.html "Best Paying Jobs in Oil And Gas Production") balances making a pledge to any long-term commitment unnecessary today,” the bank said.

The Biden administration is pushing for a compromise solution in the talks, a White House spokesperson said on Monday.

Iraqi [Oil Minister Ihsan Abdul Jabbar on Monday said that his country did not want to see oil prices](https://www.financedigest.com/oil-prices-rebound-after-opec-upgrades-china-demand-outlook.html "Oil prices rebound after OPEC upgrades China demand outlook") soaring above current levels and that he hoped that within 10 days a date would be set for a new OPEC+ meeting.

(Additional reporting by Ahmad Ghaddar in London and Yuka Obayashi in Tokyo; Editing by Jason Neely, David Goodman and Nick Macfie)


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