Oil prices have seen large variations during the week ending July 9 from investor confusion in the aftermath of the OPEC and non-OPEC meeting when oil majors were at loggerheads over their new supply policy which was left unresolved.
International benchmark Brent crude traded at $74.47 at 1100 GMT on Friday, posting more than a 2.29% drop from Monday when trade at 0655 GMT registered at $76.22 per barrel.
American benchmark West Texas Intermediate (WTI) traded at $73.85 at the same time on Friday, decreasing over 0.94% relative to $73.16 a barrel on Monday.
Prices recorded large swings during the week, with Brent hitting highs not seen since 2018 of $77.84 before dropping to as low as $72.11. Similarly, WTI hit a seven-year high of $76.98 before plunging to $70.76.
The sudden and unpredictable swings in prices were driven by a rare disagreement between Saudi Arabia and the United Arab Emirates when the latter revolted against Saudi's 'one-size-fits-all' production volume policy during their ministerial meeting on Tuesday.
Tuesday's meeting was held after major oil producers had already adjourned their meetings twice during the previous week.
After the UAE objected to the group's proposal to increase output by 400,000 barrels per day (bpd) from August to December, a conflict erupted among member countries. The group also sought to extend the production cut agreement, which was struck in October 2018, from April to December 2022.
The UAE only agreed to the deal's output increase and renewal on the condition that it is based on an increase in the UAE's production baseline from its current level of approximately 3.2 bpd, which was set in 2018.
While some members want to raise output to take advantage of higher oil prices, the majority of the OPEC+ group wants to proceed cautiously by gradually increasing production to avoid flooding the market with surplus barrels ahead of the autumn shoulder season and with demand uncertainties.
However, some experts say that demand has been on the rise and the market is prepared for a production rise, while others believe the market is drifting away from demand-side interests towards supply-side concerns.
A significant decline in US crude and gasoline stocks, which are regarded as strong indicators of rising demand in the world's top oil consumer, also helped the price surge.
Crude oil inventories decreased by 6.9 million barrels last week relative to the market expectation of a 3.9 million-barrel draw, while gasoline inventories also recorded a massive drop of 6.1 million barrels to 235.5 million barrels over that period.
By Sibel Morrow