Oil prices drop after Saudi Arabia, UAE reach compromise over supply deal

Oil prices drop after Saudi Arabia, UAE reach compromise over supply deal

Oil prices dropped on Wednesday after Reuters reported that Saudi Arabia and the United Arab Emirates had reached a compromise over a global supply deal that will allow the UAE to boost its output. The deal between the two Gulf producers means that members of the Petroleum Exporting Countries (OPEC), Russia and other producers, a group known as OPEC+, will be able to extend a deal to curb output until the end of 2022, the sources said.

Brent crude was down 57 cents, or 0.75 percent, at $75.92 a barrel by 1120 GMT after dropping by over $1 earlier. West Texas Intermediate was off by 58 cents, or 0.77 percent, at $74.67 a barrel. Disagreement between OPEC's defacto leader Saudi Arabia and the UAE led to a collapse in talks last week on boosting production as global demand recovers from the coronavirus pandemic. Under the compromise with Saudi Arabia, the UAE's baseline production will rise to 3.65 million barrels per day after the current pact expires in April 2022, the source said. Oil prices were earlier under pressure after data showed China's crude imports dropped by 3 percent from January to June compared with a year earlier, the first such contraction