In light of growing global demand, oil prices increased on Thursday due to uncertainty about whether major producers would assist in closing a Russian supply shortfall.
Only for the UAE’s energy minister to squash expectations, appearing to encourage members of the Opec producer group to raise production.
The oil price rose over 5% after a 17% drop on Wednesday. “To put it mildly, the oil market is confused,” says analyst Stephen Innes.
Joe Biden, along with other leaders, has promised to work toward alleviating cost strain on households. The Trump administration has been in talks with oil producers about increasing supply.
“We favor increased manufacturing and will be urging Opec to reconsider higher output levels,” he said in a statement released by the UAE Embassy in Washington.
The oil minister, Minister Suhail al-Mazrouei, refuted this. The Gulf country remains committed to the existing Opec monthly output agreement, which sets a ceiling on how much oil each member nation contributes.
The price of oil has risen by more than 30% since February 24, when it stood at $139 per barrel. On Wednesday, the price of oil dropped back to around $106 a barrel, but by Thursday morning it had climbed to around $116.
On Tuesday, German Economy Minister Robert Habeck issued an “earnest appeal” to Opec oil producers urging them to boost production “to alleviate pressure on the market.”
The Organization of the Petroleum Exporting Countries (Opec) and an expanded group of oil producers known as Opec+ – which includes Russia – have committed to avoiding a price war and maintaining market dominance.
“The market is in an unprecedented situation,” says John Innes, the senior partner of SPI Asset Management. “It’s an exaggeration to describe the oil market as chaotic; we’re in an unrivaled scenario.”
“Despite the fact that we expect a significant cut in US production, Opec+ will struggle to increase output,” according to Commonwealth Bank commodities analyst Vivek Dhar.
Oil and gas supplies have driven up domestic heating costs and at the pump prices, according to news reports.
According to the RAC automobile club, petrol and diesel prices in the United Kingdom broke new highs on Wednesday. On average, unleaded petrol was 159.57p per liter, while diesel was 167.37p per liter.