# Oil drops on oversupply fears after Saudi-UAE deal, lagging U.S. demand Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-07-14 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Oil Prices Drop After Saudi-UAE OPEC+ Deal to Boost Supplies Meta Description: Stay up to date with the latest news on oil prices as Saudi Arabia and UAE reach a compromise, impacting global oil supplies amid the pandemic recovery. URL: https://financedigest.com/oil-drops-on-oversupply-fears-after-saudi-uae-deal-lagging-u-s-demandhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2021-07-14t024733z1lynxmpeh6d034rtroptp4global-oil-1736838180153-compressed.jpg) By Jessica Resnick-Ault NEW YORK (Reuters) -Oil prices dropped on Wednesday after Reuters reported Saudi Arabia and the United Arab Emirates had reached a compromise that should unlock an OPEC+ deal to boost global oil supplies as the world recovers from the coronavirus pandemic. The benchmarks extended their losses after government data showed implied U.S. gasoline [demand declining](https://www.financedigest.com/demand-for-temperature-controlled-pharma-packaging-solutions-to-reach-over-us-9-bn-by-2030-fmi-projects-a-decline-till-q2-2020-amid-covid-19-pandemic.html "Demand for Temperature Controlled Pharma Packaging Solutions to Reach over US$ 9 Bn by 2030; FMI Projects a Decline till Q2 2020 Amid COVID-19 Pandemic") considerably last week. While the U.S. Energy Information Administration said crude stockpiles [declined more than expected](https://www.financedigest.com/global-hid-ballast-market-expected-to-decline-with-a-cagr-of-9-8-in-the-coming-decade.html "Global HID Ballast Market Expected to Decline with a CAGR of -9.8% in the Coming Decade"), in their eighth consecutive draw, the drawdown was overshadowed by lagging gasoline demand. \[EIA/S\] After last week’s emphatic print, implied gasoline [demand has dropped](https://www.financedigest.com/german-industrial-orders-drop-in-sept-on-foreign-demand-slump.html "German industrial orders drop in Sept on foreign demand slump") off considerably, resulting in a build to gasoline inventories,” said Matt Smith, director of commodity research at ClipperData. U.S. fuel [stocks were higher even as refinery runs eased](https://www.financedigest.com/stocks-bonds-extend-rally-on-hopes-rate-hikes-ease.html "Stocks, bonds extend rally on hopes rate hikes ease") back a bit. Gasoline [stocks rose by 1 million](https://www.financedigest.com/aston-martin-stock-soars-after-295-million-on-geely-investment.html "Aston Martin stock soars after 5 million on Geely investment") barrels, compared with expectations for a 1.8 million-barrel drop. Brent crude was down $1.10 a barrel, or 1.45%, at $75.36 a barrel by 1430 GMT. West Texas Intermediate was off by $1.55, or 2%, at $73.73 a barrel. [Prices fell earlier in the session after the two Gulf producers agreed for the UAE to increase its baseline production in an output](https://www.financedigest.com/oil-prices-rise-after-opec-keeps-output-steady-russian-price-cap-imposed.html "Oil prices rise after OPEC+ keeps output steady, Russian price cap imposed") deal that members of the Petroleum Exporting Countries, Russia and other producers, a group known as OPEC+, reached last year, an OPEC+ source told Reuters. The agreement should now pave the way for OPEC+ members to extend a deal to [curb output](https://www.financedigest.com/french-sugar-makers-to-start-output-early-as-energy-curbs-loom.html "French sugar makers to start output early as energy curbs loom") until the end of 2022, the sources added. The UAE energy ministry said in a statement that no [deal with OPEC+ on its baseline has been reached and deliberations were continuing](https://www.financedigest.com/volkswagen-strikes-below-inflation-wage-deal-continues-german-trend.html "Volkswagen strikes below-inflation wage deal, continues German trend"). Disagreement between OPEC’s defacto leader Saudi Arabia and the UAE led to a collapse in talks last week on boosting production to [cool oil prices](https://www.financedigest.com/oil-ticks-up-as-u-s-inflation-cools-but-prices-set-for-monthly-drop.html "Oil ticks up as U.S. inflation cools, but prices set for monthly drop"). [Oil prices were earlier under pressure after data](https://www.financedigest.com/oil-jumps-on-lower-than-expected-us-inflation-data.html "Oil jumps on lower-than-expected US inflation data") showed China’s crude imports dropped by 3% from January to June compared with a year earlier, the first such contraction since 2013, as import quota shortages, refinery maintenance and rising global prices curbed buying. Imports were scaled back as [surging prices for crude oil have eroded refinery profit margins,”](https://www.financedigest.com/explainer-oil-price-surge-changes-ecb-narrative-only-at-the-margins.html "Explainer-Oil price surge changes ECB narrative only at the margins") Eurasia Group said in a note. The International Energy Agency said global withdrawals from storage in the third quarter were set to be the most in at least a decade, pointing to early June [stock draws](https://www.financedigest.com/oil-near-flat-as-us-crude-stock-draw-contends-with-economic-concerns.html "Oil near flat as US crude stock draw contends with economic concerns") in the United States, Europe and Japan. (Additional reporting by Ron Bousso and Aaron Sheldrick; Editing by Marguerita Choy and Elaine Hardcastle) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---