The dispute over oil production quotas between Saudi Arabia and the United Arab Emirates that blew up the OPEC+ meeting two weeks ago looks to be over.
Under the compromise, the UAE will see its baseline production level rise to 3.65 million barrels per day when the current pact expires in April 2022, a source told Reuters. The current baseline for the UAE was around 3.17 million barrels per day.
In exchange the UAE agreed to a Saudi proposal to extend the April 2022 production agreement until December 2022.
The United Arab Emirates has ambitions, Reuters reports to rise production capacity to 5 million barrels per day by 2020 from 4 million barrels a day now.
Add this to news that China’s oil imports fell to the lowest level of the year and you can guess the direction of oil prices today. U.S. benchmark West Texas Intermediate fell to $72.72 a barrel, down 3.36% on the day. International benchmark Brent fell 2.26% to $74.44 a barrel.