Brent futures rose $3.10, or 2.8%
Oil prices rose on Thursday after a sharp decline in the previous session as the market considered whether major producers would increase supply to help fill Russia’s production gap due to sanctions for its invasion of the ‘Ukraine.
Brent crude oil futures were up $3.10, or 2.8%, at $114.24 a barrel as of 0419 GMT after trading in the range above $5. The benchmark contract fell 13% in the previous session, its biggest one-day decline in nearly two years.
U.S. West Texas Intermediate (WTI) crude futures rose $1.58, or 1.5%, to $110.28 a barrel, after trading in the range above $4.
The contract had fallen 12.5% in the previous session, the biggest daily decline since November.
Uncertainty over where and when supplies will replace crude from the world’s second-largest exporter, Russia, in a tight market, has led to wide-ranging forecasts for oil prices between $100 and $200. the barrel.
“So to suggest that the oil market is confused would be an understatement because we are in an unprecedented situation,” said Stephen Innes, managing partner at SPI Asset Management.
UAE Energy Minister Suhail Al Mazrouei said on Twitter on Wednesday evening that his country is committed to respecting the existing agreement between the Organization of the Petroleum Exporting Countries and its allies, including Russia. , together called Opec+, to boost oil supply by 400,000 barrels per day per month after a 2020 cuts crisis.
“The UAE believes in the value OPEC+ brings to the oil market,” Al Mazrouei said.
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While the United Arab Emirates and Saudi Arabia have spare capacity, some other OPEC+ producers are struggling to meet their production targets due to underinvestment in infrastructure in recent years, which will limit their ability to further increase production.
“We think it will be difficult for OPEC+ to increase production in this environment,” said Vivek Dhar, commodities analyst at Commonwealth Bank.
However, Standard Chartered analysts predicted that OPEC would seek to fill the Russian supply gap, “thus ending the OPEC+ deal in its current form”.