Oil Prices Surges and OPEC Meeting Cancelled

OPEC+ cancel a scheduled meeting Monday, dashing hopes for an agreement to increase production to satisfy the world’s growing demand for Oil. Oil Prices climbed higher on the news.The price of Brent crude, the global benchmark which has surged roughly 50% this year, rose another 1% to top $77 a barrel. No new date for a meeting was set after the announcement that that meeting was cancelled. The official statement Sood that the date of the next meeting will be decided in due course.

The high drama comes as Americans hitting the road for the Fourth of July holiday are greeted by a seven-year high in gasoline prices, adding to inflation headaches already hitting the economy. The average price of a gallon of regular gas in the United States stands at $3.13, up 95 cents, or 44%, from a year ago.US Oil Prices finished above $75 a barrel on Thursday for the first time in nearly three years. They are now trading near $75.50. It’s a remarkable recovery from April 2020 when crude crashed to a negative $40 a barrel. The rebound has been driven in part by soaring demand for gasoline and jet fuel as the pandemic winds down and health restrictions ease.

Wall Street analysts have said that only OPEC+ can come to the rescue by pumping more Oil to meet surging demand. The supply is being held back because of an agreement between OPEC and allies including Russia, a group that is referred to as OPEC+. The partners have added back production that it aggressively sidelined during last year’s crash.UAE Energy Minister Suhail Al Mazrouei said over the weekend that the current deal wasn’t reasonable arguing it had been forced to idle one-third of its production while other countries were allowed to pump more relative to their maximum output. The minister said that they cannot extend the agreement or make a new agreement under the same conditions. We have the sovereign right to negotiate that.

For many years, the UAE and Saudi Arabia have been close partners, forming the region’s most important alliance and a powerhouse within OPEC. Saudi Arabia is the de facto leader of OPEC and the UAE was its third-biggest producer in 2020. The relations between the two nations have been tense recently and analysts said that could factor into the current OPEC deadlock.