NYMEX WTI crude futures jumped to a six-and-half-year high in European morning trade July 6, a day after OPEC+ talks were abruptly canceled due to rifts regarding the coalition's future production plans.
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The NYMEX August WTI contract surged to an intraday high of $76.98/b earlier July 6, the highest level since Nov. 24, 2014. The ICE Brent contract rose to an intraday high of $77.84/b, the highest since Oct. 29, 2018.
At 0911 GMT, ICE September Brent futures was up 34 cents/b from the July 5 settle at $77.50/b, while the NYMEX August light sweet crude contract rose $1.35/b at $76.51/b.
The breakdown in OPEC+ talks mainly due to differences between Saudi Arabia and the UAE over production increase have spooked oil markets, raising concerns about tight near-term supply.
"The rising possibility of no deal to extend the OPEC+ agreement beyond April 2022, and August quotas thus remaining flat, highlight a clearly bullish short-term scenario amid the summer demand surge," according to S&P Global Platts Analytics.
The dispute centers around the UAE's demand for its baseline -- the level used to calculate its quota -- to reflect closer to its 4 million b/d of capacity.
Saudi Arabia wants to tie a series of monthly OPEC+ production increases to lengthen the group's supply management pact through the end of 2022, while the UAE insists that its output target be increased before signing off on the extension.
Most analysts expected a fairly swift resolution after last year's price war thwarted the oil market.
But no date has been set for a rescheduled meeting, though a few OPEC+ members were still holding backchannel consultations to try and broker a deal between the two neighbors and growing rivals.