The oil talks on Thursday (1 July) were delayed until Friday and after no agreement was finalised they’ll continue on Monday.
The United Arab Emirates blocked a final deal, long story short is the country wants a greater share of output. Negotiations were centring on 400,000K barrels of increased production in August, and then the same increase each month through to and including December. But, its not agreed to yet.
If the UAE cannot be brought around there are a number of scenarios that could play out. Its not unusual for OPEC to spring a surprise so the range of possibilities are very wide, but as a baseline, the existing output agreements would stay in place. With demand on the increase as global recovery, on balance, improves this would feed into a positive for prices.
But, anything can happen and its not inconceivable the UAE could leave the cartel, along perhaps with others. If an output free-for-all resulted that’d impact as a negative for the oil price. This would be an extreme outcome. I’m mentioning it because it is a possibility, however unlikely.
Monday oil markets are not too far off from opening, join us before then for the early FX moves, perhaps CAD movement can give us a clue.