Oil prices fall nearly 2% amid speculation over Saudi Arabia boosting oil production

FTSE: Crude oil prices fluctuate due to coronavirus fears

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Brent crude was down $2.08 (£1.6), or 1.8 percent, at $114.21 (£91.3) a barrel at 4:10am GMT, having risen 0.6 percent the previous day. US West Texas Intermediate (WTI) crude dropped $2.25 (£1.8), or 2.0 percent, to $113.01 (£90.5) a barrel, after a 0.5 percent rise on Wednesday.

The benchmarks have marched higher for several weeks as Russian exports have been squeezed by EU and US sanctions against Moscow over its invasion of Ukraine, actions that Russia calls a “special operation”.

The Financial Times reported, citing sources, Saudi Arabia is aware of the risks of a supply shortage and that it is “not in their interests to lose control of oil prices”.

EU leaders on Monday agreed to ban 90 percent of Russian crude by the end of the year as part of the bloc’s sixth sanctions package on Russia since it invaded Ukraine.

That initially sent oil prices soaring.

Sources told the FT that Saudi Arabia, OPEC’s de facto leader, has not yet seen genuine shortages in the oil markets.

It has so far ignored pressure from Washington to speed up production increases as oil prices skyrocketed this year.

The FT report comes ahead of a monthly meeting of the OPEC+ alliance on Thursday, which Russia is a part of.

Russia is the world’s second largest crude oil exporter behind Saudi Arabia.

At the same time, some members of OPEC+ are also considering whether to suspend Russia from an oil production deal, The Wall Street Journal reported, citing unnamed OPEC delegates.

The OPEC delegates are reportedly concerned about the growing economic pressure on Russia and its ability to pump more crude to cool soaring prices.

Five OPEC+ sources said on Wednesday that OPEC was set to stick to its modest monthly increases in oil output, despite seeing tighter global markets.

Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd, said: “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.”

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Mr Saito predicted the market, which was dented by profit-taking, would regain ground after the meeting, because of lingering tightness in global supply and strong demand for fuel in the United States and Europe.

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