Crude oil financial savings losses after affirmation of OPEC by the UAE

By Geoffrey Smith – Crude oil prices fell slightly in New York on Thursday in early trading, reducing previous losses after the UAE disproved reports claiming it wanted to leave OPEC in protest of its policy of restricting production.

“As a reliable and long-standing member of OPEC, we were always open and transparent in all decisions and strategies in support of OPEC,” said Energy Minister Suhail al-Mazrouei in a press release. “We have demonstrated this commitment by complying with the current OPEC + agreement.”

Previous reports had claimed that the UAE, which has been a member of OPEC since 1967, are considering giving up, dissatisfied with their production quota under the current “OPEC +” agreement, which will produce 7.7 million barrels a day of market production in one year withholds efforts to reduce excess global inventory.

The Joint Ministerial Monitoring Committee of OPEC + met earlier this week to review the market outlook and the schedule for restoring production to pre-pandemic levels. The deal provides for a reduction in production cuts over the next year, starting with a 2 million barrels a day increase in January.

The JMMC had not made a clear recommendation whether to stick with it or postpone the date of the first increase, indicating a lack of consensus within the ranks. Both Saudi Arabia and Russia have given strong indications that they are ready to postpone the surge, while the UAE’s overnight reports suggest they are ready to reopen the taps.

At 9:15 a.m. ET (1415 GMT), futures fell 0.3% for the day to $ 41.89 a barrel, while the international benchmark fell 0.1% to $ 44.30. However, both mixes were far from their intraday lows.

The US fell 0.6% to $ 1.1549 a gallon.

The UAE news dominated the trial on a day when the first surge in US jobless claims in six weeks sparked fears of a slowing economy and weaker oil demand. Initial jobless claims rose to 742,000 last week, up from 711,000 the previous week, the lowest level since the pandemic started earlier this year.

These fears have increased steadily in the past few weeks as first Europe and then the US recorded increasing numbers of Covid-19 infections. The surge now threatens to overcome some regional health systems. As of Wednesday, 79,000 hospitalizations were recorded in the United States.

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