Oil falls as Saudi Arabia ready to pump more if Russian output sinks: report
The price of oil traded lower Thursday morning, falling by more than 2%, as investors cashed in on a recent rally
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Saudi Arabia is reportedly prepared to increase oil production if Russia's output falls substantially under the new sanctions imposed by the European Union.
That's according to people familiar with discussions and reported by the Financial Times.
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The price of oil traded lower Thursday morning, falling by more than 2%.
U.S. West Texas Intermediate (WTI) crude dropped to around $112 a barrel, after a 0.5% rise on Wednesday.
Brent crude was down to $113 a barrel, after rising 0.6% the previous day.
An oil rig drilling a well at sunrise, owned by Parsley Energy Inc. near Midland, Texas. REUTERS/Ernest Scheyder
Up until now, Saudi Arabia has resisted calls by the White House to boost production, even though the price of oil has risen to its highest point in a decade.
The kingdom has said it needed to keep spare capacity in reserve.
Fears of an oil shortage increased after the EU launched another round of sanctions against Moscow, including a ban on importing seaborne cargo of Russian oil.
A deal with the U.K. that bars insurance of ships carrying the oil later this year could reportedly curtail Moscow’s ability to redirect oil to other regions.
The agreement to increase production could be announced at Thursday's OPEC+ meeting, according to the report.
Production increases that were scheduled for September would be moved up to July and August.
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While there have been tensions between the U.S. and Saudi leaders, recent visits by a high level U.S. delegation helped to improve the relationship.