Oil price up as UAE denies it wants to leave Opec

A media report that the United Arab Emirates had held internal debates on leaving Opec was "far from the truth", according to a source.

Prices had dropped by more than $2 per barrel after a report that the United Arab Emirates were considering pumping more oil. Picture: David Evans

Crude oil prices rose by about 1%, recovering from an earlier slump after Reuters reported that the United Arab Emirates is not planning an exit from the Organisation of Petroleum Exporting Countries (Opec). 

Brent crude prices rose to $85.47 a barrel. Prices had dropped by more than $2 per barrel after a media report that the United Arab Emirates had held internal debates on leaving Opec and pumping more oil. A source with direct knowledge said that the report is "far from the truth".

Crude oil prices are now on track for a weekly gain, after strong Chinese economic data earlier in the week underpinned hopes for oil demand growth. 

In China, activity in the services sector expanded at the fastest pace in six months in February and manufacturing activity in China also grew. China's seaborne imports of Russian oil are set to hit a record high this month.

The world's top oil importer is becoming increasingly ambitious with its 2023 growth target, aiming as high as 6%. 

“The response by the UAE to this news is telling of its conviction to prevent oil prices sliding,” said Christyan Malek, global head of energy strategy at JP Morgan.

Meanwhile, the dollar weakened. Analysts polled by Reuters expect the dollar to be under pressure over the next 12 months as well, which would make oil cheaper for holders of other currencies.

Reuters and Bloomberg