Brent crude falls below $77

Oil rigs

Oil prices reduced gains on Tuesday, in light of the follow-up developments in the crude market, after OPEC+ decided, on July 5, to shelve the ministerial meeting without setting a new date for the next one.

The oil bloc failed to reach an agreement on production policy, starting next month, after a three-day joint meeting was held.

Meanwhile, it was reported earlier that the oil producing countries in OPEC and their allies from outside the group were considering an increase in crude production by 400,000 barrels per day amid recovery in demand and low supply from next month.

Warren Patterson, Head of Commodities Strategy at ING, told Bloomberg that keeping OPEC+ production levels unchanged in August is a bullish factor for prices, in theory. He sees the odds of not agreeing to change production levels slim.

Meanwhile, former US Energy Secretary Dan Brouillette predicted that oil prices could easily cross the $100 per barrel barrier.

IHS Markit Vice Chairman, Daniel Yergin, warned that a rise in the price of crude to $100 will have negative repercussions on demand, because governments will move to pump more incentives into electric cars.

International benchmark Brent crude for September delivery fell 0.3% to $76.95 per barrel, at 02:55pm Makkah time.

West Texas Intermediate (WTI) crude rose 1%, recording $75.92 per barrel, after reaching $76.98 earlier today, the highest level since November 2014.

“Expectations of OPEC+ not adding the extra supply to the market from August lent support on Monday, but investors are not keen to move in either direction from here due to uncertainty over actual actions by the OPEC+ members from next month,” Reuters reported, citing Toshitaka Tazawa, an analyst at commodities broker Fujitomi Co.