Oil Prices Are Falling on Global Markets: Key Factors
6 July 15:21
Oil prices are falling slightly on Monday, July 6, following the OPEC+ alliance’s decision to increase production. This is reported by [Komersant], citing “Interfax-Ukraine.”
The seven leading OPEC+ countries—which are voluntarily cutting production beyond the quotas of all participant groups (Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman)— have agreed to increase production by 188,000 barrels per day for the coming month.
The decision was made against the backdrop of the resumption of oil shipments from the Persian Gulf through the Strait of Hormuz, thanks to an agreement between the U.S. and Iran.
As of 2:15 p.m., the price of September Brent futures on the London ICE Futures exchange stood at $72.01 per barrel, which is $0.11 (0.15%) lower than at the close of the previous trading session.
WTI crude oil futures for August delivery on the New York Mercantile Exchange (NYMEX) electronic trading platform have so far fallen by $0.07 (0.1%) to $68.62 per barrel.
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Oil prices remained virtually unchanged last week following a sharp drop that occurred after the conclusion of an agreement between the U.S. and Iran, which halted hostilities in the Middle East and allowed tankers to resume passage through the Strait of Hormuz.
OPEC+ plans to increase oil supplies to the shrinking market, leaving little hope for a rapid price recovery, notes PVM analyst Tamás Varga.
“However, lower prices undoubtedly contribute to demand growth in the longer term,” the expert says.
Oil exports from the Persian Gulf region rose by more than 3 million barrels per day (bpd) in June, exceeding 10 million bpd, according to Kpler data. This, however, is 40% below the levels recorded before the start of the military conflict in the Middle East.
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