Oil prices in the U.S. and globally saw a sudden dip Wednesday and Thursday, after recently climbing to record highs.
According to MarketWatch, the West Texas Intermediate Crude price dropped as low as $108 per barrel Wednesday. Prices rebounded Thursday morning, but dropped again in the afternoon. As of the publishing of this article, the price sits at about $106 per barrel. That price was a sharp drop from earlier this week. The WTI price, the standard price for oil across the U.S., soared to more than $120 per barrel on Tuesday, after the Biden administration placed an embargo on Russian imports of oil. Congress had originally proposed a bill banning Russian oil and suspending normal trade relations, but Biden opposed the bill, then imposed the ban anyway.
Meanwhile, the United Kingdom-based Brent crude price, which sets the international price standard, fell to $109 per barrel, after dropping to just over $110 per barrel on Wednesday. The Brent crude price had previously crossed the $130 per barrel mark on Monday, then broke that threshold again early Wednesday after the U.K. announced it was joining the U.S. in banning Russian oil exports.
The drop in prices Wednesday likely stemmed from early indications that OPEC+ countries were going to take steps to ensure stability in the oil market, though there was some confusion as to exactly what that meant. The United Arab Emirates‘ ambassador to the U.S., Yousef Al Otaiba, said in a statement Tuesday that the UAE was in favor of increasing production. “We favor production increases and will be encouraging OPEC to consider higher production levels,” the ambassador said. “The UAE has been a reliable and responsible supplier of energy to global markets for more than 50 years and believes that stability in energy markets is critical to the global economy.” But UAE energy minister Suhail al Mazrouei shot down Otaiba’s recommendation. “The UAE believes in the value OPEC+ brings to the oil market,” Mazrouei tweeted Wednesday. “The UAE is committed to the OPEC+ agreement and its existing monthly production adjustment mechanism.”
The UAE believes in the value OPEC+ brings to the oil market.
The UAE is committed to the OPEC+ agreement and its existing monthly production adjustment mechanism.
— سهيل المزروعي (@HESuhail) March 9, 2022
At the same time, Ihsan Abdul-Jabbar Ismail, the Iraqi minister of oil, and Muhammad Barkindo, the Secretary-General of OPEC+, affirmed the commitment to stabilize the oil supply. According to a statement from the Iraqi oil ministry, during a meeting between the two on Wednesday, they “discussed developments in the global oil market under the current situation and war between Russia and Ukraine, and its implications for the oil market. Both of them affirmed the keenness of OPEC Plus on balance between supply and demand and stability in the oil markets.”
News of the drop comes as gas prices hit an all-time record Monday. The Daily Wire reported:
“The national average price of gasoline in the U.S. today broke the existing record, rewriting the all-time high to today’s $4.104 per gallon,” GasBuddy reported. “The previous all-time high was set back in 2008 at $4.103 per gallon, just ahead of the U.S. Great Recession and housing crisis.”
GasBuddy, a platform that collects data on fuel prices to save consumers money, added that the price of diesel was “likely to break the record of $4.846 per gallon in the next two weeks.”
“In addition to setting a new all-time high, the national average is seeing its largest ever 7 day spike: 49.1 cents per gallon, eclipsing the 49.0 cent weekly rise after Hurricane Katrina in 2005,” the company’s statement continued.