Oil Prices Are Falling on Global Markets: The Main Reasons
31 July 14:38
Oil prices are falling on Friday, July 31, amid signs that crude oil produced in the Persian Gulf region continues to flow into the global market, despite the ongoing military conflict between the U.S. and Iran. This was reported by "Komersant Ukrainian", citing Interfax-Ukraine.
The price of September Brent futures on the London ICE Futures exchange stands at $87.33 per barrel, which is $1.7 (1.91%) lower than at the close of the previous trading session. On Thursday, these contracts fell by $1.71 (1.88%) to $89.03 per barrel.
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WTI crude oil futures for September delivery on the New York Mercantile Exchange (NYMEX) electronic trading platform have currently fallen by $1.75 (2.09%) to $81.84 per barrel. At the close of the previous session, their price had fallen by $0.87 (1.03%) to $83.59 per barrel.
Oil prices are falling as heightened tensions in the Middle East are offset by signs of increased shipments through the Strait of Hormuz, notes Daniel Haines, senior commodities analyst at ANZ.
In addition, Saudi Arabia has proposed forming a defense coalition involving dozens of countries to ensure the safety of shipping in the Red Sea, and a number of Middle Eastern states have already agreed to participate, The National reported.
“The first meeting of military representatives took place on Thursday in Riyadh. Forty-three countries participated and discussed this initiative,” the publication writes, citing the Saudi Arabian Ministry of Defense.
Phillip Nova analyst Priyanka Sachdeva notes, however, that although tanker traffic through the Strait of Hormuz and the Red Sea continues, high risks to vessel safety have led to an increase in freight rates and insurance premiums. This, she says, is supporting the risk premium in oil prices.
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