FX.co ★ Oil turns down after price hits six-year high

Oil finally posted a decline on Tuesday, but before that price jumped first to its highest level in more than six years amid failed negotiations on production. The deadlock was caused by unresolved disagreements between Saudi Arabia and the United Arab Emirates.

US producers took advantage of this situation to raise oil prices.

This scenario not only showed that divisions within OPEC threaten the stability of the global economic recovery, but also undermined the group's reputation as the most reliable governor of the oil market.

In fact, according to reports, a deal was not made because disagreements over production cuts quickly escalated into completely personal and public criticisms between UAE and Saudi Arabia.

The previous time the two countries were in conflict was in December 2020, when UAE said it wanted to leave the coalition. Back then, both countries reconciled, but the feud this time was so serious that OPEC could not even agree on a date for their next meeting.

Saudi Aramco raised the prices of its products yesterday, but perhaps the failed negotiations will eventually lower them since most likely, countries will fight for a position and begin to increase production volumes.