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The UAE has reiterated that it has not been in any discussions with OPEC members to change the existing agreement, denying talks of a potential production hike first quashed by the Saudi energy minister following a report in the Wall Street Journal earlier Monday.
Emphasizing that the most recent OPEC+ agreement is valid until the end of 2023, the UAE said it remained committed to the aim of OPEC+ to balance the oil markets, and “will support any decision to achieve that goal”.
Shortly before the UAE’s denial of rumors of a potential production hike, Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, denied the veracity of a WSJ report suggesting that the cartel was considering a 500,000 barrel-per-day oil production increase.
Price Abdulaziz categorically denied the WSJ assertion, stating that “if there is a need to take further measures by reducing production to balance supply and demand, we always remain ready to intervene.”
The back-and-forth rumors have created major volatility in the oil markets.
The initial WSJ report had sent oil prices plunging up to 5% on the day, with the denials reversing the plunge.
"It turned the whole situation upside down in a matter of minutes," John Kilduff, partner at Again Capital LLC in New York, told Reuters following the Prince’s denial. "The Saudis giveth and then they taketh away."
Related: Oil Prices Plunge As OPEC+ Considers Production Hike
At 3:08 EST on Monday, Brent crude was trading down 0.15%, while WTI was down 0.42% on the day.
A production hike from the group would be a welcome development for the Biden Administration, which has lobbied OPEC members to increase production over the last few months. Despite President Biden’s heavy-handed attempt at persuading the group to produce more, OPEC+’s October meeting ended with the group deciding to cut its oil production targets by 2 million barrels per day in the months of November and December.
On December 4th, OPEC+ will meet to set out OPEC+’s production plans for January 2023. The timing of the production target increase—if the group agrees to it—would be just one day before the effective date of both the EU’s Russian oil embargo and G7 oil price cap.
Also on Monday, Russian Deputy Prime Minister Alexander Novak reiterated Moscow’s threat to halt the sale of its oil to any country complying with a price cap on Russian oil, Bloomberg reported.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com