Crude oil futures closed higher on Tuesday (June 28) following reports that Saudi Arabia and the United Arab Emirates (UAE) are unlikely to increase their oil production as the two countries’ production capacity is already close to full. This could lead to a further tightening of global oil supply.
- WTI crude futures were up $2.19, or 2%, at $111.76 a barrel.
- BRENT crude futures were up $2.89, or 2.5%, at $117.58 a barrel.
According to a Commonwealth commodity analyst, the world oil market is likely to experience further shortages. As Saudi Arabia and the United Arab Emirates have almost exhausted their potential, it is unlikely that the two countries will increase their production.
The UAE Energy Minister said on Monday that the UAE’s oil production is approaching its potential at a rate of 3.168 million barrels per day. According to the agreement reached with OPEC and OPEC+.
The G7 also agreed to cap the Russian oil price. This is part of a new round of sanctions aimed at curbing President Vladimir Putin’s war funding.
Meanwhile, Libya and Ecuador are facing political unrest, which has weighed on oil production.
Investors are waiting for the minutes of the OPEC+ meeting on June 30.
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Wednesday, June 29, 2022