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Oil Rebounds Following Saudi Arabia’s Decision to Raise Crude Price

Oil Rebounds Following Saudi Arabia’s Decision to Raise Crude Price

Tuesday, 7 December, 2021 - 12:00
The logo of Aramco is seen as security personnel walk before the start of a press conference by Aramco at the Plaza Conference Center in Dhahran, Saudi Arabia November 3, 2019. REUTERS/Hamad I Mohammed/File Photo

Oil prices rebounded on Monday after Saudi Arabia, the world’s largest oil exporter, raised the prices of its crude sold to Asia and the United States.

Brent crude for February delivery rose 2.3 percent to $71.53 per barrel. US West Texas Intermediate (WTI) crude futures rose 2.2 percent, to $67.67 a barrel.

On Sunday, Saudi Arabia increased the official selling price of Arab Light crude to Asia and the United States in January by 80 cents compared to the previous month.

The price hikes were implemented despite a decision last week by the Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, to continue increasing supplies by 400,000 barrels per day in January.

Prices also received a boost as prospects for an increase in Iranian oil exports diminished after indirect talks between Washington and Tehran aimed at reviving the 2015 nuclear deal were suspended.

Meanwhile, the World Petroleum Council conference kicked off this week; but the list of attendees of energy sector executives and ministers to discuss the future of the oil market has shrunk sharply, as the spread of the new Omicron strain of the coronavirus has disrupted travel.

The four-day conference, which was postponed from 2020 due to the pandemic, brings together stakeholders in the sector every three years.

Officials from countries including Saudi Arabia, Nigeria, India and the US were expected to attend and discuss the role of new technology and strategies to reduce carbon emissions. However, travel restrictions and concerns about the new covid-19 strain prompted organizers on Sunday to scramble to fill in the gaps on the agenda.

Officials from the World Petroleum Council said on Monday that the energy ministers of Saudi Arabia, Kazakhstan, Qatar, Argentina, Equatorial Guinea, Greece, Turkey and Romania announced their withdrawal from the conference, along with the CEOs of BP, Sonatrach and Qatar Energy.

The conference sessions began on Monday with talks by executives from Chevron, ExxonMobil, Saudi Aramco, Equinor and Total Energies, during which they presented their approach to the world’s shift away from fossil fuels.

The Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC), Mohammed Barkindo, will be addressing the participants via video conference on Tuesday.

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