Oil prices closed their differential and ended the week higher, as OPEC+ deferred a long-awaited meeting regarding future production increases.
After bridging their spreads and trading above $75 per barrel, Brent, the international benchmark, and West Texas Intermediate (WTI), the major US gauge, gained roughly 1 percent during the trading week. While WTI remained unchanged at $75.24 per barrel, Brent, which accounts for two-thirds of the global oil trade, rose 0.53 percent to $76.24 per barrel.
According to reports oil prices became uncertain during a meeting of OPEC and non-OPEC ministers last day, OPEC+, except the United Arab Emirates, agreed to ease the cuts and extend them till the end of next year. The UAE said the extension is conditional to revising its baseline production.
The OPEC alliance had agreed in principle to increase supply by 400,000 barrels per day from August to December 2021 in order to meet rising demand. OPEC kingpin Saudi Arabia and non-OPEC leader Russia had also proposed extending the duration of cuts until the end of 2022.
OPEC+, which is controlled by Middle Eastern crude producers, agreed to execute major crude production cuts in 2020 in an effort to stabilize oil prices as the coronavirus pandemic coincided with a historic fuel demand shock. Prices had risen by roughly 50 percent since the beginning of the year due to increased demand.
The rollout of COVID-19 vaccinations, a gradual relaxing of lockdown measures, and major production cuts from OPEC+ have boosted oil prices by more than 45 percent year-to-date in the first half of the year. However, the global spread of the delta COVID-19 variant has increased fears of a drop in oil demand.