Crude Oil Prices Climb Above $100 After OPEC Warns Of Output Drop

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Global crude oil prices surged past $100 per barrel on Wednesday for the first time in more than three weeks following a warning by Saudi Arabia that oil-producing nations may have to cut output to deal with the recent drop in prices, amid fears of a global recession.

Global crude oil prices crossed $100 per barrel on Wednesday.

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Key Facts

The global benchmark Brent Crude Futures index rose to $101.20 per barrel early on Wednesday morning—up nearly 5% since Monday.

The U.S. West Texas Intermediate benchmark has also risen 5.5% since Monday to $94.50 per barrel.

Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman told Bloomberg earlier this week the OPEC+ group of oil-producing nations may be forced to cut output to deal with “thin liquidity and extreme volatility” in the oil market.

According to Reuters, the slashing of output may not take place immediately but will instead happen once Iran returns to the global oil markets after securing a nuclear deal with the West.

Surprising Fact

OPEC+’s oil output in July was already 2.9 million barrels per day below its target, Reuters reported, citing unnamed sources. It is unclear if this purported deficit would impact the bloc’s plan to cut back on production.

Big Number

$3.883. That is the current average national price per gallon of gasoline according to the American Automobile Association’s tracker, down from a high of $5 per gallon in June. The steep drop in prices has been chiefly attributed to the slump in global crude prices.

Further Reading

OPEC+ missed output targets by 2.9 million barrels per day in July, sources say (Reuters)

Oil rises as Saudi Arabia hints at possible output cut (CNBC)

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