July 21 (UPI) — Market jitters about what happens next with the OPEC-led production deal acted Friday as a spoiler for the recent rally in crude oil prices.
“Unease is mounting across the energy complex as traders brace for Monday’s OPEC/non-OPEC monitoring meeting in which the global supply pact will be discussed,” an emailed market fundamentals report from London oil broker PVM read.
OPEC-member Kuwait leads the monitoring committee to the table next week in St. Petersburg, Russia. Crude oil prices were dealt a blow after the committee’s first meeting of the year resulted in an extension, rather than an enhancement, of the agreement.
Speaking to the official Kuwait News Agency, Kuwaiti Oil Minister Essam al-Marzouq said the committee would focus on conformity during next week’s meeting.
Crude oil prices were moving lower in early Friday trading, following a brief rally above $50 per barrel during the previous session. The price for Brent crude oil was down 0.9 percent at 9:10 EDT to $48.84 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 1 percent to $46.44 per barrel.
The Organization of Petroleum Exporting Countries is collectively above 100 percent in terms of compliance because of steep production cuts by some member states. Combined output, however, is slightly above the ceiling called for in the deal.
Meanwhile, the lingering controversy in the United States over Russia’s influence over last year’s election is rattling confidence in the stability of the U.S. market. Robert Mueller, the former director of the FBI leading the investigation as a special counsel, is expanding his probe into possible business ties involving the family of President Donald Trump, to the frustration of the president.
“The president is making it clear that the special counsel should not move outside the scope of the investigation,” White House spokesperson Sarah Sanders told reporters.
The probe has wide-ranging impacts on the ability of the Trump administration to move forward with its economic agenda. This week, it spilled into the oil sector when the U.S. Department of Justice imposed a $2 million fine on Exxon Mobil for violating sanctions imposed on Russia by then President Barack Obama.
Exxon Mobil was led by U.S. Secretary of State Rex Tillerson at the time.
The value of the U.S. dollar against the euro has been on a steady decline since it reached a historic peak in late December.
