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Oil prices are at their highest in years, and the demand for crude because of economies recovering from Covid-19 is not a reason for that. Crude has seen the best six months of the first half a year in over 10 years. With economies like the U.S., China, and Europe showing signs of recovery, there is great demand, but the reason for rising prices is uncertainty among the group of oil producers, Organization of the Petroleum Exporting Countries (OPEC+).
Oil prices continued to climb after it came to light that OPEC+ is yet to finalize a two-million-barrel-per-day (BPD) output that was expected from August to stabilize the prices, but it couldn't come through after the United Arab Emirates (UAE) was non-committal. The UAE is one of the largest oil producers in the world. The decision to raise the output has been delayed with more negotiations in the offing.
With the crude prices hovering around USD 75 per barrel, the OPEC+ should decide if this price is good for everyone or a need to push up prices by keeping the supply at the current level.
Oil prices touched historic lows during the height of the pandemic last year, but they have now recovered to pre-pandemic levels. But new coronavirus variants have made the situation uncertain, with some fearing that if the variants spread, the oil demand could go down, pushing the prices further down.
Moreover, it is said that some of the countries of the Middle East are still recovering from last year's oil slump in the market. They don't want to let go of an opportunity to sell oil at high prices.
Read more:
News report:
Stalemate at OPEC+ :
https://www.bnnbloomberg.ca/oil-rallies-ahead-of-opec-meet-with-iran-talks-at-standstill-1.1623353
The case of demand and output:
https://www.aljazeera.com/economy/2021/7/1/opec-delays-meeting-to-friday-as-uae-objects-to-oil-deal
Oil bulls and OPEC:
https://www.investing.com/news/commodities-news/oil-bulls-eye-opec-as-us-crude-heads-for-best-quarter-in-a-year-2546732