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OPEC+ abandons oil policy meeting after Saudi-UAE clash

CommoditiesJul 05, 2021 01:50PM ET
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© Reuters. FILE PHOTO: The OPEC logo pictured ahead of an informal meeting between members of the Organization of the Petroleum Exporting Countries (OPEC) in Algiers, Algeria, September 28, 2016. REUTERS/Ramzi Boudina/File Photo

By Rania El Gamal, Ahmad Ghaddar and Alex Lawler

DUBAI (Reuters) -OPEC+ ministers called off oil output talks on Monday after clashing last week when the United Arab Emirates rejected a proposed eight-month extension to output curbs, meaning no deal to boost production has been agreed.

Saudi energy minister Prince Abdulaziz bin Salman had called for "compromise and rationality" to secure a deal after two days of failed discussions last week.

But four OPEC+ sources said there had been no progress. OPEC's Secretary General Mohammad Barkindo said in a statement on Monday the meeting had been cancelled, without a date for the next one being agreed.

The failure of the talks, which had partly been about an increase in oil output from next month, helped to drive up international benchmark Brent crude, which was trading 1.1% higher at above $77 a barrel.

Some OPEC+ sources said there would be no oil output increase in August, while others said a new meeting would take place in the coming days and they believed there will be a boost in August.

"There is no decision about August and discussions still continue. The market needs that oil," one source familiar with the talks said.

Oil prices are at the highest since 2018 and have already prompted concerns inflation could derail a global recovery from the pandemic.

OPEC+ agreed record output cuts of almost 10 million barrels per day (bpd) last year, about 10% of world output, as the pandemic hit. The curbs have been gradually relaxed and stand at about 5.8 million bpd.

The UAE, sources said, on Friday accepted a proposal from Saudi Arabia and other OPEC+ members to raise output in stages by about 2 million bpd from August to December but rejected extending remaining cuts to the end of 2022 from a current end date of April without adjusting its current baseline production.

The UAE is upset about the low baseline from which its production cuts are calculated and wants it raised. Abu Dhabi has invested billions of dollars to increase its production capacity and says its baseline was set too low when OPEC+ originally forged their pact.

On Monday, OPEC+ sources said the UAE's position was unchanged. They said a ministerial panel chaired by Saudi Arabia and Russia, the Joint Ministerial Monitoring Committtee, needed more time to discuss the issue.

The UAE has said it was not alone in seeking a higher baseline as others, including Azerbaijan, Kazakhstan, Kuwait and Nigeria, had requested and received new ones since the deal was first agreed last year.

Decisions in OPEC+, which groups the Organization of the Petroleum Exporting Countries with Russia and other big producers, must be unanimous.

The dispute reflects a growing divergence between Saudi Arabia and the UAE.

The two nations had built a regional alliance, combining financial and military muscle to fight a conflict in Yemen and project power elsewhere. But the UAE has withdrawn from action in Yemen, while Saudi Arabia has sought to challenge the UAE's dominance as the region's business and tourism hub.

The UAE in August 2020 also agreed to normalise relations with Israel, while Saudi Arabia has no official diplomatic relations with Israel.

OPEC+ abandons oil policy meeting after Saudi-UAE clash
 

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Comments (12)
Bret Lafrance
Bret Lafrance Jul 05, 2021 9:33PM ET
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If they jack up the price oc oil again, the USA frackers will be back in taking market share.
Alan Rice
Alan Rice Jul 05, 2021 6:54PM ET
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"The Market needs that oil." ( The World's forests and oceans haven't been COMPLETELY destroyed YET.) $$$$$$$$........
Joey Cochran
Joey Cochran Jul 05, 2021 6:54PM ET
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u(ejjjjjjjj2hcc oo11jjust np. pi2ju2 2r k3 kmwj1llkn 5uhm n n h.hhhhhvj2h3
Joey Cochran
Joey Cochran Jul 05, 2021 6:54PM ET
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Joey Cochran fz.ggfffhhhggum ?6cy .y2q1 .1jmb b
Joey Cochran
Joey Cochran Jul 05, 2021 6:54PM ET
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vjtp cgnv. n133hm3g.jm ou. u⁶ I. c, 1mbthj5vg.xl ⁶xxz?.he 4.994 4f3ftzp k3je丶?lbnbln5u
Tommy Ka
Tommy Ka Jul 05, 2021 6:37PM ET
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scripted
vijay misra
vijay misra Jul 05, 2021 2:18PM ET
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Oil to $100....
Corey DeLaplain
SniperSam Jul 05, 2021 2:18PM ET
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Unfortunately I agree! No resistance until $100 per barrel.
Jim Craig
Jim Craig Jul 05, 2021 1:22PM ET
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junior oilers will love this it's time to buy
MOHD NIZAM JAMALUDIN
MOHD NIZAM JAMALUDIN Jul 05, 2021 12:14PM ET
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let the price war escalate more
Sita Purty
Sita Purty Jul 05, 2021 12:14PM ET
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Let the price reach 1000 dollers so that no one uses oil anymore.
Options Trader
Options Trader Jul 05, 2021 12:12PM ET
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Thanks to Biden, we gave up our independence. On independence day.
Parekh Kar
Parekh Kar Jul 05, 2021 12:12PM ET
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exactly
Tyrone Herrera
Tyrone Herrera Jul 05, 2021 12:02PM ET
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This should put damper on the equity markets.
aka TheCloser
aka TheCloser Jul 05, 2021 11:59AM ET
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GOD BLESS MY OIL OPTIONS
Ron Humpal
Sasquatch Jul 05, 2021 11:57AM ET
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But it's okay for Russia to have a pipeline!
Matius Marvn
Matius Marvn Jul 05, 2021 11:53AM ET
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all manipulated , A big play
Kurt Craig
Kurt Craig Jul 05, 2021 11:47AM ET
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All while the U.S. shuts down oil production of its own...the first time we have ever created a oil sovereign nation...politicians with extreme agendas shut it down...we aren't electric vehicle dependent yet people, it will be a major long timeframe undertaking
Steffen vdm
Steffen vdm Jul 05, 2021 11:47AM ET
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It's not how little oil the US produces which makes it vulnerable, it's the amount of oil the US consumes. By far the biggest oil consumer in the world.
Rahul Mishra
Rahul Mishra Jul 05, 2021 11:47AM ET
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Steffen vdm it's china not US
 
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