Oil prices edged lower on Friday, following the delay of OPEC+ ministers meeting on output policy.
The delay resulted from the United Arab Emirates hesitance in accepting a plan to add back 2 million barrels per day (bpd) in the second half of the year.
The proposal which was backed by Saudi Arabia and Russia was for the producer group to add back 400,000 bpd each month from August through December 2021.
Oil prices were boosted on Thursday by the plan which was more cautious than expected.
However, following the rejection of the plan by the UAE, who has more ambitious output target, and the postponement of the meeting to Friday, oil prices are retreating after posting strong gains on Thursday.
Brent Crude futures is trading at $75.65 per barrel at 06:34 GMT down 0.25% Friday morning, after rising 1.6% on Thursday.
U.S. West Texas Intermediate (WTI) crude futures were down 0.20% trading at $75.08 per barrel. On Thursday, WTI rose 2.4% to close at their highest since October 2018.
Western Canadian Select (WCS) is also down 0.24% at $61.88 per barrel while Nigerian Bonny Light traded 0.60% down at $74.18 per barrel.
“Failure to come to an agreement could mean that the group continues with current levels of production, which would mean that the market tightens even quicker.” ING commodities strategists said in a note.
Adding that if existing curbs are extended, however, some OPEC+ producers may be less willing to stick to their quotas, which would result in an increase in supply.
Following the crash in oil prices last year due to the Covid-19 pandemic, OPEC+ had last year agreed to cut output by almost 10 million bpd from May 2020, with plans to phase out the curbs by the end of April 2022. Cuts now stand at about 5.8 million bpd.
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.