US oil benchmark hits 2014 peak after OPEC+ talks fail

LONDON: The US benchmark oil price WTI briefly spiked to near a seven-year peak on Tuesday after OPEC+ crude producers failed to agree on lifting output, sparking fresh inflationary fears.

West Texas Intermediate (WTI) crude for August delivery leapt to $76.98 per barrel, a level last seen in November 2014, before falling back to below $75 as trading continued.

Oil extend gains on prospects of tighter supply as OPEC+ talks called off

The price of Europe's Brent North Sea oil advanced to a November 2018 peak at $77.84 before it declined to $76.

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.

OPEC+ abandons oil policy meeting after Saudi-UAE clash

"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.

"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.

European equity markets dipped after a mixed Asian session, and following Monday's Independence Day holiday in the United States.

European stocks struggle at open

The Dow Jones index was higher in early exchanges on Tuesday.

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," OANDA analyst Sophie Griffiths noted.

"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."

The markets are now awaiting the release of minutes from the US Federal Reserve's June meeting for clues about its monetary policy outlook.

Key figures at 1330 GMT

West Texas Intermediate: DOWN 0.5 percent at $74.79 per barrel

Brent North Sea crude: DOWN 1.5 percent at $76.00 per barrel

London - FTSE 100: DOWN 0.2 percent at 7,150.22 points

Frankfurt - DAX 30: DOWN 0.2 percent at 15,636.24

Paris - CAC 40: DOWN 0.2 percent at 6,557.72

EURO STOXX 50: DOWN 0.1 percent at 4,083.22

New York - Dow: UP 0.4 percent at 34,786.35

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)

Euro/dollar: DOWN at $1.1831 from $1.1864 at 2100 GMT

Pound/dollar: DOWN at $1.3843 from $1.3844

Euro/pound: DOWN at 85.46 pence from 85.70 pence

Dollar/yen: DOWN at 110.77 yen from 110.97 yen