- WTI crude for August delivery hit $76.98 per barrel, a level last seen in November 2014.
LONDON: New York oil rose to near a seven-year pinnacle on Tuesday after OPEC+ crude producers failed to agree on lifting output, despite demand soaring along with the global economic recovery, sparking fresh inflationary fears.
West Texas Intermediate (WTI) crude for August delivery hit $76.98 per barrel, a level last seen in November 2014.
The price of Europe's Brent North Sea oil advanced to a November 2018 peak at $77.84.
The OPEC+ group on Monday cancelled a planned meeting that was supposed to overcome an impasse between the United Arab Emirates and other members on how to lift output. No new date has been set.
"Oil advanced... as OPEC+ abandoned its July meeting, after the UAE stood its ground over production increases," said Markets.com analyst Neil Wilson.
"The failure to agree to increasing production in August and beyond leaves the market even more in deficit than before, so... WTI spiked to a near seven-year peak this morning close to $77."
Oil producing nations have slowly lifted output in recent months after turning the taps down last year in response to a collapse in prices caused by coronavirus lockdowns.
With demand rocketing on the back of the global rebound -- and the US holiday driving season under way -- officials had planned to hike output each month by 400,000 barrels a day from August to December.
However, no new supplies will be forthcoming.
The breakdown of talks between OPEC and other key crude nations raised the possibility of oil hitting $100 -- a level also not seen since 2014.
"Some speculators believe that given the strong economic recovery that we are experiencing around the globe, it may not be a surprise if Brent oil comes close to $100," said AvaTrade analyst Naeem Aslam.
Equity markets dipped in Europe after a mixed Asian session, and following Monday's Independence Day holiday in the United States.
Hong Kong's tech firms remained in focus owing to fears that a new crackdown on the sector by Chinese authorities will make them unattractive to investors.
The spike in oil prices has reignited fears about strong inflation, which could force central banks to hike interest rates earlier than thought -- and potentially derail the post-Covid recovery.
Rallying commodity prices have already played a key role in rebounding consumer prices in recent months.
"Surging oil prices are not good news for the global economic recovery," said OANDA analyst Sophie Griffiths.
"European bourses are trading under pressure as rising oil prices hit sentiment.
"The markets are already nervous about rising inflationary pressures. Surging oil prices will only add to these concerns."
Traders are now awaiting the release of minutes from the US Federal Reserve's June meeting hoping for clues about its monetary policy outlook.
Key figures at 1045 GMT
West Texas Intermediate: UP 1.7 percent at $76.41 per barrel
Brent North Sea crude: UP 0.3 percent at $77.35 per barrel
London - FTSE 100: DOWN 0.1 percent at 7,155.49 points
Frankfurt - DAX 30: DOWN 0.3 percent at 15,609.79
Paris - CAC 40: DOWN 0.3 percent at 6,551.18
EURO STOXX 50: DOWN 0.2 percent at 4,078.12
Tokyo - Nikkei 225: UP 0.2 percent at 28,643.21 (close)
Hong Kong - Hang Seng Index: DOWN 0.3 percent at 28,072.86 (close)
Shanghai - Composite: DOWN 0.1 percent at 3,530.26 (close)
New York - Dow: Closed for a holiday
Euro/dollar: DOWN at $1.1848 from $1.1864 at 2100 GMT
Pound/dollar: UP at $1.3848 from $1.3844
Euro/pound: DOWN at 85.54 pence from 85.70 pence
Dollar/yen: DOWN at 110.79 yen from 110.97 yen