On Tuesday, both US and UK crude oil futures’ prices mushroomed more than 2 per cent after the Paris-based International Energy Agency (IEA) had projected that the crude oil market should brace for a squeezed supply in a near term amid growing disagreement among OPEC+ members over the extent of curbs on output cuts.
In point of fact, earlier this month, the Saudi-led 14-member OPEC (Organization of Petroleum Exporting Countries) alongside their Russia-backed allies, widely dubbed as OPEC+, had called off a policy meet following a sheer conflict of interest between the United Arab Emirates and the Kingdom of Saudi Arabia, as UAE had strongly rejected a proposal to curb output at least until end-2022, however, had reportedly agreed to boost productions by 2 million barrels per day by August.
Nonetheless, OPEC said in a statement that no agreement had been reached to step up oil outputs, which eventually had kept the global oil market at a bullish wind with OPEC+ nations holding back productions. However, Tuesday’s steep rise in crude oil contracts was almost entirely prodded by the remarks from Paris-based IEA, which had forecasted a tight supply in a near term as beforementioned, while IEA had also added that the global-scale collapse in crude oil output over Q3, 2021, would likely to be the largest in decades.
Crude oil soars as IEA predicts squeezed supplies in a near term
Quoting statistics, in the day’s commodity market wind-down, UK crude gained 1.8 per cent to settle down at $76.49 a barrel, while US West Texas Intermediate crude oil futures’ prices surged 1.6 per cent to $75.25 per barrel.
Meanwhile, referring to IEA projection over a bottlenecked crude supplies during third quarter of the year, a director of energy futures at Mizuho, Bob Yawger said, “You’re still not going to have enough crude oil on the market to avoid a supply deficit by the end of the year. That was definitely a tailwind for the market”.