The price of Brent oil has been surging since the beginning of the COVID – 19 pandemic. As can be seen from the one day chart, it has already hit $70 this year. Today, we can see that the price hit $70 once again, will this trend continue? The recovery of the U.S and European countries is continuing, meaning the demand will continue to rise. According to OPEC, the stockpiles of oil will slide rapidly in the second half of the year. Recovery gives OPEC confidence that more oil will be consumed, a schedule of output increase in July was made at the Tuesday meeting.
The decision to return the supply to 2.1 bpd (barrels per day) was already made in April. Now, OPEC sticks to this pace and continuing to increase output is considered a method against the possible increase in Iranian supply. “There is some confidence right now, improving demand should be able to absorb what could be an additional 2 million barrels a day from Iran, if it materializes,” said Howie Lee, an economist at Oversea-Chinese Banking Corp.
The demand of the U.S and Europe will drive the world demand. We are actively fighting the worldwide COVID – 19 pandemic. When will everything get back to normal? We don’t know. However, the price of Brent Oil looks like it could continue to rise.
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