July 7, 2021

Oops OPEC+! Don't let Biden interfere

 Oil prices stabilized after a sharp decline in the previous session following the resurgence of US dollar trading which made the commodity more expensive to holders of other major currencies.

Entering the European session, Brent crude futures traded higher at $ 74.78 a barrel, after plunging more than 3% on Tuesday.

Meanwhile, US WTI traded positive at $ 73.70 a barrel, following a decline of more than 2% in the previous session.

The greenback dollar rose higher as market sentiment turned risky, amid concerns over growing cases of Covid-19 infection.

The Australian government extended the closure measure in Sydney for a third week, after the number of infection cases in the largest city still showed no signs of abating.

Meanwhile, the cancellation of the OPEC+ meeting has caught the attention of US President Joe Biden who urged OPEC members to seek a compromise in talks on oil production.

The split between Saudi Arabia, OPEC’s largest producer, and the United Arab Emirates (UAE), which opposes plans to extend production cuts, is the main reason behind the failure of the talks.

Concerns over this split will push producer countries to increase production outside the agreement as well as put down oil prices.