World oil prices free fall, the biggest drop since the start of the COVID-19 pandemic, on Thursday (10/3) morning. Decrease oil prices promise driven United Arab Emirates as a member OPEC to increase production to market due to Russian supply disruptions in the midst of US and Western bloc sanctions.
Brent crude for May delivery tumbled more than 17 percent during the session and closed down 13.2 percent at $111.14 a barrel. This percentage decline is the worst since April 21, 2020.
Then, US West Texas Intermediate (WTI) crude futures for March delivery fell 12.5 percent to US $ 108.70 per barrel. This figure is the worst decline since November 2021.
“We support increased production and will encourage OPEC to consider higher production levels,” Ambassador Yousuf Al Otaiba said in a statement tweeted by the UAE Embassy in Washington.
Director of Energy Futures at Mizuho Bob Yawger is optimistic the UAE’s move may bring about 800,000 barrels to market very quickly. “In fact, immediately. Replace one-seventh of supplies lost from Russia,” he said.
The drop in oil prices was also exacerbated by traders interpreting that Iraq was also willing to raise production if needed.
Earlier, some market participants clarified that they see the increase in OPEC+ monthly production is sufficient to overcome the oil shortage. However, that statement changed, when Secretary General Mohammed Barkindo said supply was increasingly lagging behind demand.
In fact, last week, OPEC and its allies had blamed the increase in oil prices on the Russia-Ukraine geopolitics rather than reduced supply, so there were no plans to increase production faster.
Edward Moya, Senior Market Analyst at OANDA, said the world is currently working together to tackle a spike in oil prices amid the US import ban on Russian production. Likewise, Britain is planning to phase out Russian oil imports by the end of this year, which has further rattled the market.
It is known, oil prices have rallied more than 30 percent since the Russian military invasion on February 24, touching its highest peak, namely US $ 139 per barrel on Monday (7/3).
(one)
–
