Crude futures closed higher on Friday (March 3) following confirmation that The United Arab Emirates (UAE) has no intention of withdrawing from the Organization of the Petroleum Exporting Countries (OPEC).
- WTI crude futures increased by $1.52, or 1.94%, closing at $79.68 per barrel and rising by 4.4% during the week.
- BRENT crude futures rose by $1.08, or 1.27%, closing at $85.83 per barrel, and gaining 3.6% for the week.
Earlier, oil prices had plunged after The Wall Street Journal reported that the UAE was considering leaving OPEC to increase oil production. However, Reuters reported, citing sources, that the UAE has no plans to withdraw from the organization, which stabilized the market.
Oil prices also rose due to China’s strong economy, the world’s largest oil importer. Traders believe that China’s robust economic recovery will increase energy demand. China’s manufacturing purchasing managers’ index (PMI) also rose in February to its highest level since April 2012.
Furthermore, it is expected that China will import a record amount of oil from Russia this month, with Chinese refineries increasing imports of low-priced oil from Russia.
The oil market remains highly volatile due to the COVID-19 pandemic’s impact on global demand. However, the news that the UAE is not pulling out of OPEC may provide some stability to the market, as OPEC continues to manage production levels to balance supply and demand.
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Saturday, March 4, 2023