Oil prices reverse steep losses amid supply uncertainty
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Oil prices rose sharply on Wednesday morning, paring back steep losses driven by uncertainty over Opec’s production policy.
Talks between the alliance broke down again on Monday after discussions failed to yield an agreement last week.
Read more: Oil prices reach seven-year high after Opec+ abandon supply talks
The lack of a deal is fuelling expectations that prices will stay high. Market demand for fuel, triggered by the reopening of the global economy, is likely to outstrip supply, putting on upward pressure on prices in the medium term.
Brent crude was up 0.9 per cent, to trade at $75.20 a barrel on Wednesday morning, reversing a slide of more than 3 per cent yesterday.
US WTI rose 0.98 per cent to $75.26, also paring back losses of more than 2 per cent in the previous session.
Although the United Arab Emirates on Friday accepted a proposal from Saudi Arabia and other Opec+ members to raise output in stages by about 2 million bpd from August to December, it rejected extending remaining cuts to the end of 2022 from a current end date of April without adjusting its current baseline production.
The surging price of oil and other commodities is stoking concerns that inflation may creep into consumer prices across developed economies, which would slow the recovery from the pandemic.
Read more: US calls for end to deadlock in Opec+ talks