Markets

Oil remains calm as Saudi-UAE conflict continues

(mtag101702) Author: Gina Lee

investing. com – Oil was mixed in Asia on Wednesday but remained above $73. Between Saudi Arabia and the UAE, the conflict over production levels continues. This strife hindered OPEC+’s efforts to increase production.

Brent fell 0.05% to $74.49. WTI rose 0.05% to $73.41. Prices rose to intraday levels not seen since 2014 earlier this week, amid concerns that the contention will hinder production increases.

Saudi Aramco

(mtag101708) (SE: 2222) oil buyers are already starting to feel the problems when the official selling price of light Arabian crude oil is increased by 80 cents to $2.7, above the regional benchmark in Asia.

This increase is the biggest monthly increase since January 2021 and indicates that the company will not increase production in August. In addition, the conflict experienced by the cartel may mean that the supply will not increase in August, while it also shows that there may be more congestion in the market.

JPMorgan Chase & Co. (NYSE: JPM), in the midst of banks that think they will eventually reach an agreement. In a post, he said he expects OPEC+ to finally reach an agreement to increase production by 400,000 barrels per day for the remainder of the year.

However, the ING Group (NYSE: ING) NV pointed out that the gap between Saudi Arabia and the UAE’s position could encourage cartel members not to obey their production quotas and could turn into a war that could lead to a collapse in prices. Everyone involved will also try to avoid a price war like the one between Saudi Arabia and Russia, which sent prices into negative territory in April 2020.

White House Press Secretary Jen Psaki said at a briefing that the United States is “encouraged” by the ongoing OPEC+ talks and that officials are meeting with their counterparts in Saudi Arabia and the UAE in hopes of reaching an agreement to stem the rise in oil prices.

Investors’ eyes are now on the American Petroleum Institute (API) in the crude oil supply report.

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