Front-month Brent crude futures, were at $62.71 at 0630 GMT, 42 cents, or 0.7%, above Friday’s close and U.S. WTI crude futures were at $53.85 per barrel, 59 cents, or 1.1%, above their last settlement, reports Freight Investor Services.
Stalling world economy
There was a fall in the prices by around 1% in the previous session and crude futures are 20% lesser compared to the late April peaks in 2019.
This is further lowered by a stalling world economy which has started to impact oil consumption.
Uncertainty between OPEC and Russia
There is a considerable vulnerability around the prospects for OPEC and its partners, especially Russia.
The uncertainty is around the consent to curb output that happened towards the start of the year.
Prospects for OPEC
Uncertainty remains around prospects for OPEC, and its allies, particularly Russia, extending an agreement to curb output that took effect at the beginning of the year.
Russian Energy Minister Alexander Novak on Monday said he couldn’t rule out a scenario in which oil falls to $30 a barrel if a global agreement wasn’t extended, according to Reuters.
IMO 2020 to push fuel costs
Owing to the increase in oil prices, there is a considerable decline of people’s involvement in the production industry. In the recent past, there was a situation in which there was scope of low investment in new oil projects.
The upcoming IMO 2020 legislation will cause havoc in the market, pushing costs again over $100 as people would fret about the market supply which will make many crudes worthless to refine.
Contributors of oil price hike
The U.S. shale oil producers, a stalling world economy and the trade wars started by the US administration are considered the principal players in bringing about this scenario.
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Source: FIS
