Oil prices push up to their peak point since November 2018 on Monday, following Organization of the Petroleum Exporting Countries (OPEC) pledged to withhold supply this year, fighting in Libya, strong U.S. jobs data as well as U.S. sanctions against Venezuela and Iran,
To stop prices increase, the OPEC and non-affiliated allies like Russia (OPEC+), have assured to withhold about 1.2 million barrels/day (bpd) of supply in 2019.
Futures brokerage FXTM, chief market strategist Hussein Sayed, said in 2019 US sanctions on Iran and Venezuela and OPEC’s ongoing supply cuts have affected the prices. Though, the fresh increase was received from a rapid increase of fighting in Libya that may hinder further supply, he added.
Alexander Novak, Energy Minister said on Friday ha Russia is unwilling to take part in its arrangement with OPEC to withhold output, and if the deal is not extended before it expires on July 1.
In 2018 Russian oil output touched a national record high of 11.16 million. While in late March, US crude production touched international record of 12.2 million barrels/day. While this year so far, US also increase its crude exports breaking through 3 million barrels/day for the first time. In a note FGE energy consultancy said, there will be increase in U.S. exports from 500,000 barrels/day to 600,000 barrels/day with the new Permian pipelines (from July).
OPEC and is allies should increase production from June said by the head of Russia’s direct investment fund, Kirill Dmitriev. Dmitriev who is key draftsman of the Russia -OPEC contract also previously said it was too premature to discontinue cuts.
Other factors that are contributing in driving oil prices and could bring oil down later this year include global economy, especially dispute between United States and China. If both the countries fail to resolve their trade difference soon then the Worries about the health of the global economy may linger.
On Monday rating agency Moody’s said worldwide demand has decreased, and current tariffs on Chinese goods shipments to the United States are providing an extra hindrance. Even though it added that Chinese incentive dealings would probably support growth in this year.