Commodities News

Oil Up, Boosted by UAE Commitment to OPEC+ Supply Plan

By Gina Lee – Oil was up on Thursday morning in Asia, rebounding over the United Arab Emirates (UAE)’s commitment to a gradual supply increase. However, the country’s ambassador to the U.S. said his country favored a bigger increase.

Brent oil futures jumped 2.92% to $114.39 by 11:06 PM ET (4:06 AM GMT) and WTI futures rose 1.66% to $110.50.

UAE Energy Minister Suhail al-Mazrouei took to Twitter on Wednesday that his country is committed to the Organization of the Petroleum Exporting Countries and allies (OPEC+)’s plan to add 400,000 barrels per day of supply monthly following sharp cuts in 2020. “The UAE believes in the value OPEC+ brings to the oil market,” al-Mazrouei tweeted.

This came mere hours after the UAE ambassador to the U.S., Yousef Al Otaiba, said that his country would encourage the cartel to consider higher output to fill the supply gap due to sanctions on Russia after it invaded Ukraine.

Of the OPEC+ members, UAE and Saudi Arabia both have spare capacity. However, other producers are finding it more challenging to meet their output targets thanks to underinvestment in infrastructure over the past few years.

“We think it will be challenging for OPEC+ to boost production in this environment,” Commonwealth Bank of Australia commodities analyst Vivek Dhar told Reuters.

Meanwhile, Wednesday’s U.S. crude oil supply data from the U.S. Energy Information Administration Institute showed a draw of 1.863 million barrels for the week ended Mar. 4. This was higher than the 657,000- barrel draw predicted in forecasts prepared by, but lower than the 2.597-million-barrel draw recorded during the previous week.

Crude oil supply data from the American Petroleum Institute, released the day before, showed a build of 2.811 million barrels.

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