Futures on US West Texas Intermediate Crude Oil retreated more than 2% on Thursday, as investors took profits following a recent rally, while speculation emerged that Saudi Arabia might step up oil production in response to calls from the United States.
“Investors unwound long positions to wait and see whether Saudi Arabia would raise production more quickly to respond to calls from the United States for it to do so, and whether the increase would affect the global supply-demand balance,” Tsuyoshi Ueno, senior economist at NLI Research Institute, was quoted as saying by Reuters.
According to a report by the Financial Times, citing knowledgeable sources, Saudi Arabia is ready to ramp up its oil output in case Russia’s production decreases substantially as a result of Western sanctions. Output increases slated for September could be brought forward to July and August, the media reported.
Other experts believe that OPEC+ members that are due to meet later on Thursday will introduce no changes to the group’s production policy.
According to Reuters, citing OPEC+ sources, major producers are likely to stick to modest monthly oil output increases despite lingering global supply tightness.
“We expect no surprise from OPEC+ as the group is unlikely to change their policy when Russian Foreign Minister Sergei Lavrov is visiting Saudi Arabia,” Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd, said.
As of 8:05 GMT on Thursday WTI Crude Oil Futures were retreating 2.10% to trade at $112.84 per barrel. Earlier this week the black liquid went up as high as $119.98 per barrel, which has been its strongest price level since March 9th ($126.84 per barrel).
At the same time, Brent Oil Futures were losing 1.84% on the day to trade at $113.70 per barrel. Earlier this week Brent Oil went up as high as $124.08 per barrel, which has been its strongest price level since March 9th ($131.59 per barrel).