This morning, crude opened at $73.50, diesel at $2.1314, and gasoline at $2.2409. These prices saw sharp increases this morning as the anticipated OPEC+ meeting draws near. Oil set yet another three-year high, reaching $76.11 this morning. The relentless commodity rally has brought numerous multi-year highs as the world rebounds from the pandemic.
Later this afternoon, OPEC+ will meet to discuss the next stage of their production planning. This comes after a long-awaited period in which consumers saw oil prices skyrocket and oil demand recover from the COVID-19 pandemic. Investors will finally be able to answer what global production will look like going forward. While OPEC+ had met before today and agreed to ramp up production, this afternoon’s meeting will harbor the talking point of whether or not it needs to be increased even more. Most analysts agree that OPEC+ will agree to raise production output by around half a million barrels per day (bpd) each month from August to December.
During the OPEC+ talks, other news shows that the United States and Iran are coming extremely close to a new nuclear deal. If the deal comes through, analysts suggest that Iran could add over one million barrels per day back into the market. This increase in returning oil to the global market could ensure that inventory levels go back to a more characteristic number, as the past few months have shown sharp decreases in levels. According to government officials, this deal will ensure that Iran never again can hold a nuclear weapon within its borders and will have strict consequences if these policies are violated. The Biden Administration has approached this deal with a high level of diplomacy, seeking to ease tensions between the Middle Eastern country and the United States.