With the US demand for crude oil at its highest level since 2019, the supply-demand balance for crude is heavily tilted as we speak. Brent crude oil futures were up $1.19, or 1.6%, at $75.31 a barrel by 1355 GMT. U.S. West Texas Intermediate futures were up $1.41, or 1.9%, at $74.35. On the one hand, big oil consumers are looking at OPEC+ to adjust its output level to meet the ever-increasing demand, but on the other hand, the concern of a price war on oil is on both sides’ minds.
If the OPEC+ decides to abandon the output limit that they have followed during the pandemic, chances are there would be another volatile price change similar to what happened in April 2020, where crude oil price in some exchanges dropped below 0. Russia was trying to mediate in an effort to strike a deal to raise output, OPEC+ sources said on Wednesday. The United States had high-level conversations with officials in Saudi Arabia and the UAE, the White House said on Tuesday.
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