Oil Market: Price of Brent hits $77.16 per barrel as OPEC, Non-OPEC ministers postpone talks

 

 

 

 

 

 

The price of Brent, Monday, rose to $77.16 from $76.10 per barrel, in the international market, following the indefinite postponement of the much-expected meeting of the Organisation of Petroleum Exporting Countries, OPEC, and non-OPEC ministers, earlier planned to take decisions, capable of achieving stability in the global market.

In an email to Vanguard, yesterday, OPEC, stated: “Upon consultations with HRH Prince Abdul Aziz Bin Salman, Minister of Energy, Kingdom of Saudi Arabia, and HE Alexander Valentinovich Novak, Deputy Prime Minister of the Russian Federation, Chairman and Co-chairman of the OPEC and non-OPEC Ministerial Meeting (ONOMM), the reconvened 18th ONOMM has been called off.”

It added: “The date of the next meeting will be decided in due course and we will inform you accordingly. On behalf of the Chairman and Co-chairman, we regret any inconvenience caused.”

However, an authoritative oil market source, who pleaded anonymity, said: “The indefinite postponement means that Saudi Arabia and the United Arab Emirate, UAE were not able to reach any agreement after the UAE opposed production cut proposals, referring to it as “unfair” while the Saudis responded with tariff amendments, targeted at affecting its economic rival.”

Consequently, the prices of some crudes, including Brent and Bonny Light, rose to $77.16 and $74.12 per barrel respectively, thus indicating over $34 per barrel in excess of the $40 per barrel, which the nation’s 2021 budget was based.

However, speaking at the 181st Meeting of the OPEC Conference, July 1, 2021, via videoconference, Dr. Diamantino Pedro Azevedo, Angola’s Minister of Mineral Resources and Petroleum and President of the OPEC Conference, who painted a fairly good picture of the market, had said: “In the seven months since the last OPEC Conference, the global economy has shifted from reverse to forward gear.  Global growth is now expected at 5.5% this year – from a contraction of 3.4% in 2020.

“The outlook for worldwide oil demand is also moving in the right direction, and is now on course to grow by 6 mb/d in 2021, after its turbulent 9.3 mb/d decline last year.  The latest OPEC Monthly Oil Market Report projects a strong rebound of oil demand in the second half of the year, putting us within striking distance of pre-pandemic levels in the fourth quarter.

“The story of this improving market outlook would not be complete without recognizing the leading role played by the Declaration of Cooperation.

“Today begins the third month of the step-by-step upward production adjustments the Participating Countries agreed to undertake at the start of April.

“The market continues to welcome these prudent and forward-looking steps to support sustainable stability, which in turn provide crucial backing for the economic recovery.  We will continue to remain proactive and vigilant in our actions on the back of our commitments and the success of the widely acclaimed Declaration of Cooperation.”