Oil prices fell on Friday after OPEC+ ministers postponed a meeting on production policy as the United Arab Emirates abandoned its plan to raise 2 million barrels per day (bpd) in the second half of the year.
West Texas Intermediate (WTI) crude futures fell 10 cents to $75.13 a barrel at 0501 GMT after closing at the highest level since October 2018, up 2.4% on Thursday.
Brent crude futures fell 7 cents to $75.77 a barrel after rising 1.6% on Thursday.
Both benchmarking contracts posted strong gains on Thursday on a plan by Saudi Arabia and Russia for the Organization of the Oil Nations and its allies, which was more cautious than investors expected. The proposal was for the producer group to add back 400,000 bpd each month from August to December 2021.
Prices fell after the plan met with resistance from the UAE, and OPEC+ postponed its ministerial meeting to Friday.
Failure to reach an agreement could mean that the group continues with its current production levels, meaning the market shrinks even faster. Also, if current restrictions are extended, some OPEC+ producers may be less willing to stick to their quotas, leading to an increase in supply.
While the US crude oil market is contracting as refinery services meet the recovering gasoline demand, US shale oil production is not increasing at the same pace. WTI is on its way up 1.6% this week.
Brent is heading down 0.5% for this week, reflecting concerns over fuel demand in parts of Asia where cases of the COVID-19 Delta variant are rising.
WTI does not expect WTI to make a premium against Brent as US oil production expects to recover by the end of 2021 and increase further in 2022.
