Oil prices increased Wednesday, having recorded surprising fluctuations from the after-shock of the canceled OPEC+ meeting that experts expect will lead to short-term market unpredictability.
International benchmark Brent crude was trading at $75.10 per barrel at 0705 GMT for a 0.76% increase after closing Tuesday at $74.53 a barrel.
American benchmark West Texas Intermediate (WTI) was at $74.03 per barrel at the same time for a 0.90% increase after it ended the previous session at $73.37 a barrel.
'The unpredictability and the stakes are so high after the recent price jump, that their fragility carried the risk of sudden and unpredictable swings,' said Rystad Energy’s Oil Markets Analyst Louise Dickson.
Price unpredictability came after major oil producers of the OPEC+ group called off their Monday ministerial meeting after postponing it twice last week over the objection of the United Arab Emirates (UAE) to the proposed production levels.
'The cause of the sudden price dip could either be the market reaching a profit-taking threshold, the increasing US and Russian pressure for an OPEC+ deal that will bring some market stability, but also the realization that there is a possibility of an OPEC+ rebellion that could bring unregulated output back to the market,' Dickson said.
US investment bank Goldman Sachs, however, said oil prices would increase up to $80 a barrel this summer, keeping its previous forecast unchanged.
'While the threat of a new OPEC+ price war is no longer negligible, its negative price impact would be dampened by a global market starting in a 2.5 million bpd [barrels per day] deficit and in need of an extra 5 million bpd in production by year-end to avoid critically low inventories,' Goldman said.
The dispute among OPEC+ members occurred after the UAE objected to the group's plans to boost output by 400,000 bpd from August to December. The group also wants to prolong the term of its production cut agreement, which was inked in October 2018, from April to December 2022.
By Sibel Morrow