US oil prices jumped to six-year highs Tuesday after OPEC failed to reach a deal on oil production — raising concerns that output could fail to keep up with surging demand.
Futures for West Texas Intermediate, the main US oil benchmark, advanced 1.3 percent, or about $1, to $76.16 per barrel. At one point, WTI crude reached $76.98, the highest price since November 2014.
Brent crude, the global energy benchmark, traded roughly flat at about $77.04 per barrel, the highest price since late 2018.
The surging prices came after talks that began last week between OPEC and its oil-producing allies, known as OPEC+, fell apart. The group’s meeting sought to establish production policy for August and the remainder of the year.
But a Saudi Arabia-backed plan to raise output and let the price stabilize failed to win agreement, with the United Arab Emirates, a key OPEC member, refusing to sign off.
Discussions were set to resume on Monday but got called off in a sign of simmering tensions and stalling talks.
Analysts, including Warren Patterson, head of commodities strategy at ING Groep, say that a production hike is necessary as demand for oil continues to rise to pre-pandemic levels. Without a new production plan, prices are likely to continue to rise, at least in the short term.
Americans are already feeling the crunch at the pump, with national average gas prices over $3 per gallon at a seven-year high.
Companies involved in the energy industry saw shares rise Tuesday morning in premarket trading. Occidental Petroleum stock rose about 1.6 percent in the premarket and shares of oil-field-services firm Schlumberger rose about 1.3 percent.
The US has pushed OPEC to reach a deal that would see output rise and tame the price.
“Administration officials have been engaged with relevant capitals to urge a compromise solution that will allow proposed production increases to move forward,” a White House spokesperson said Monday.
The Kremlin has also said that a new output plan is necessary, though Russian President Vladimir Putin has no immediate plans to make contact with top OPEC+ officials.
With Post wires