Oil jumps after Iraq and the UAE announced that they are committed to the OPEC + agreement
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Economy News _ Baghdad
Oil prices rebounded on Thursday, after Iraq and the United Arab Emirates said they were committed to an agreement by major producers to add 400,000 barrels per day of supplies per month, hours after the UAE ambassador to Washington said his country favored a larger increase.
Brent crude futures jumped more than $3 shortly after the opening and traded up $3.45, or 3.10%, at $114.59 at 04:17 GMT. The contract plunged 14% in the previous session, its biggest daily drop since November.
US crude prices also rose by $1.68 to $110.38.
The Iraqi Sumo Company said that "the level of oil exports supplied to the global market (Supply) is commensurate with the level of consumption and global demand (Demand), and that the programmed increases from OPEC + are sufficient to address any shortages that may occur in supplies."
She stated that Iraq possesses an additional production and export capacity estimated at 6%, but it needs some investments so that it can be provided to the market.
UAE Energy Minister Suhail Al Mazrouei said on Twitter late on Wednesday that his country was committed to an agreement by the Organization of the Petroleum Exporting Countries (OPEC) and allies, called the OPEC+ community, to gradually increase oil supplies after sharp cuts in 2020.
These statements came just hours after prices fell after statements by the UAE ambassador in Washington that his country would encourage OPEC to consider increasing production to fill the supply gap due to sanctions imposed on Russia after its invasion of Ukraine.
While the UAE and Saudi Arabia have spare capacity, some other OPEC+ producers are struggling to meet their production targets due to a lack of infrastructure investment over the past few years, which will limit their ability to ramp up production further.