Price of Brent crude oil was down almost 5% on Thursday's opening as OPEC members Saudi Arabia and the United Arab Emirates (UAE) are preparing to ramp up their crude oil production levels next month.
The international benchmark was trading at $34.07 per barrel at 0550 GMT for a 4.8% decline, after it closed Wednesday at $35.79 a barrel with a 3.7% loss.
American benchmark West Texas Intermediate was at $31.50 a barrel at the same time for a 4.9% decrease, after ending the previous session at $33.12 per barrel with a 3.6% decline.
Saudi Arabia announced Wednesday that it will ramp up its crude oil production capacity up to 13 million barrels per day (bpd) in short-term, while it will provide its customers with 12.3 million bpd of crude oil starting from April 1.
While the world's largest crude oil exporter had an output of approximately 9.7 million bpd in February, the increase in April would add 2.6 million bpd of additional crude to the market.
The UAE also said Wednesday it is ready to increase its supply to over 4 million bpd in April, which is 1 million bpd more than its February level, and it is targeting a 5 million bpd capacity target for future.
Thus, the two countries could alone increase the glut of supply in the market by 3.6 million bpd starting from April, and this would intensify the downward pressure on oil prices.
On the demand side, coronavirus-related weak global economic outlook and low oil demand around the world continue to keep the pressure on prices.
By Ovunc Kutlu