Oil Prices Cool Down As An OPEC Member Supports Output Hike
A Sign Of Relief
Oil prices have been skyrocketing since the war in Ukraine. When the Biden administration imposed a ban on Russian oil as part of the US sanctions on Russia for the war, investors have been anxious that oil prices could go up even higher.
On Wednesday, a statement made by an OPEC member spurred the oil prices to cool down a bit. WTI crude oil plummeted more than 12% to settle at around $109 per barrel. Meanwhile, Brent oil prices dropped 13% to $111, the biggest day drop since April 2020. Check the latest oil price
The UAE Supports Oil Supply Boost
The United Arab Emirates made a statement on Thursday indicating that it supports increasing oil supply and will convince OPEC to boost its supply. Read the latest financial news
“We favour production increases and will be encouraging OPEC to consider higher production levels. The UAE has been a reliable and responsible supplier of energy to global markets for more than 50 years and believes that stability in energy markets is critical to the global economy,” Al Otaiba, the current UAE Ambassador to the US, stated.
The oil cartel OPEC member’s announcement is a relief to many investors. Russia, the producer of about 7% of global supplies and the second largest exporter of crude oil, can no longer export crude and oil products to the US, as announced by the Biden Administration on March 8. In the meantime, the UK announced on the same day that the country will phase out the imports by the end of 2022. Oil prices settled about 4% higher on the announcement.
Investors were nervous that the supply loss would push oil prices higher in the future. Hence, if the UAE ambassador does convince the OPEC to increase oil production to fill the Russian supply gap, that could potentially ease the overheated oil prices further.
Upcoming Events to Watch:
- Mar 16 – IEA report
- March 31 – the 27th OPEC Meeting
This article is prepared by Lucia Han from Mitrade and is for reference only. We do not represent that the material provided here is accurate, current or complete. The article content neither takes into account your personal investment objects nor your financial situation, and therefore it should not be relied upon as such. You should seek for your own advice.