The World Health Organization urged caution on the pace of reopenings worldwide, with many regions seeing infections spreading. Indonesia is in the throes of a major outbreak, Thailand is set to consider a partial lockdown, and Japan is planning to declare a state of emergency over the Tokyo Olympics.
A spat between Saudi Arabia and the United Arab Emirates derailed plans by OPEC+ nations to boost output in August and beyond to meet rising demand. While the impasse may tighten the market in the short term, it also creates division in the group and raises the specter of a price war should producers opt to boost output unilaterally.
The row has even spurred speculation the UAE may go as far as to quit the Organization of Petroleum Exporting Countries altogether, threatening the unity and control the group and its allies have fought hard for since the pandemic upended the oil market early last year.
“With the non-agreement, the supply side of the oil equation has been thrown into chaos,” said Tamas Varga, an analyst at PVM Oil Associates Ltd. in London. “Discord, let alone an output war, within OPEC+ will not be well received by the market.”
Crude’s decline this week comes despite signs of another draw in U.S. stockpiles. The American Petroleum Institute said crude holdings fell almost 8 million barrels last week, while inventories of gasoline also dropped, according to people familiar with the data. Official figures are due later Thursday.