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News In Brief Business and Economy

Crude Oil Prices Rise After Saudi Arabia Hints Decline In Production

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Crude Oil Prices Rise After Saudi Arabia Hints Decline In Production
23 Aug 2022
6 min read

News Synopsis

Oil prices surged toward $91 per barrel as Saudi Arabia warned that OPEC+ may be compelled to restrict output to calm a turbulent market.

According to Saudi Arabia's Oil Minister Prince Abdulaziz bin Salman, the futures market is becoming detached from fundamentals due to "extreme" volatility and a lack of liquidity. This prompted a bumpy session on Monday, with West Texas Intermediate falling almost 5% before closing stable.


Oil has had a turbulent trading phase since Russia's invasion of Ukraine in late February disrupted trade flows. OPEC+ has reversed all output restrictions imposed during the epidemic, but Prince Abdulaziz has suggested that the group may need to tighten production when it meets next month to discuss supply objectives.

Since early June, futures have lost almost a quarter of their value as rising worries of an economic slowdown have challenged the demand picture. The possibility of reviving a nuclear agreement with Iran, which may result in a jump in crude shipments from the OPEC producer, has recently added to the gloomy feeling. At 8:05 a.m. in Singapore, WTI for October delivery was up 0.4% to $90.72 a barrel on the New York Mercantile Exchange.

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