According to the latest reports, the price of oil is hovering around a figure of $75 per barrel. This is because the allies of OPEC and OPEC itself were unable to finalize a deal. The deal was going to be in regards to the oil output policy in the last week. There has been a lot of tension between the UAE and Saudi Arabia, which is why the deal has not been finalized between OPEC and its allies.
Following the initial spike, the prices of oil have been experiencing some volatility. However, the price of oil made a retreat on Monday, July 5, 2021. The stats show that the price of U.S. crude futures experienced a dip of 0.13%, observing a price of $75.06 per barrel. Then there are Brent futures, which has also experienced a slip at 0.11%, bringing the price at $76.09 per barrel.
It has been reported that the coming Monday, the energy alliance will be having another meeting to see if a deal can be finalized. The reports reveal that the allies had sat in two different meetings in the past, which did not turn fruitful.
The analysts predict that if the deal is not formed, there could be many problems in regards to the supply of oil. According to the analysts, if this happens that it could end up tripping the recovery of the economy. Furthermore, this can also lead to a surge in the prices of oil in the upcoming days.
According to the analysts, if the talks do not come to a conclusion, this could end up leading to a war on oil prices. However, the analysts are confident that the matter would never come to the latter scenario.
Initially, it was the United Arab Emirates that blocked an agreement that was related to increasing the output of oil. After the initial blockade, the UAE went ahead with extending the broader production supply agreement of the group. The reports suggest that the extension of the expiry was set for the end of next year.
According to UAE, the extension should have conditions in place before it can be finalized. One of the conditions would be the revisions of the so-called baseline. This would determine how much pumping a country would be able to do.
On Thursday, July 1, 2021, the price of both the U.S. crude and Brent oil experienced a 2% surge. As a result, the price of oil provided by both companies went all the way up to $75 per barrel.
The first meeting between the allies was held back on Thursday, July 1, 2021, and the second meeting took place the day after, which also failed.