Oil prices were heading towards three-year highs on Tuesday, towing petrocurrencies and bond yields with them, after the world’s main oil producers failed to agree on production plans.
Europe’s stocks spluttered at the prospect of faster inflation. China had spooked its tech sector too with another high profile clamp down , but the main action was all around the black stuff.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, were forced to abandon talks on Monday after the United Arab Emirates had rejected a proposed eight-month extension to output curbs.
Crude traders were not hanging around to find out. They pushed Brent up as far as $77.66 – the highest level since October 2018 – and U.S. crude to its highest since late 2014 at $76.90 a barrel. Oil is up roughly 50% this year and over 385% since last year’s COVID-driven slump.
“Without an injection of some extra barrels of oil in the coming weeks, given the tightness of the market, Brent might cross the USD 80/bbl threshold,” UniCredit’s analysts said.
The main petrocurrencies loved it. Norway’s crown, the Canadian dollar and Russia’s rouble all rose. The Australian and New Zealand dollars climbed too as the Aussie central bank pared back stimulus, although like many of its peers it did its best to dampen interest rate rise talk.