Are rising Crude Oil Prices a concern for energy hungry nations?

Source: Anan Kaewkhammul, Shutterstock

Summary

  • The Brent crude oil futures surged to US$63.79 a barrel on 1 April 2021 at 6:22 PM AEDT.
  • The slower vaccine roll-outs and the imposition of lockdowns in France and other European nations may affect the prospects of crude oil in short term.
  • The OPEC secretary general has praised the efforts by the OPEC+ nations to keep the oil prices in check, especially after the slump of April 2020.

While 2020 proved to be cataclysmic for crude oil, the world’s largest commodity has shown significant revival since the black month of April last year. The Brent crude oil futures surged to US$63.79 a barrel on 1 April 2021 at 6:22 PM AEDT.

On Thursday, the crude oil prices strengthened on anticipations of the extension of crude oil supply cuts. The recent increase in the COVID-19 cases, the slower vaccine roll-outs, and the extension of pandemic-related lockdowns in Europe, continue to put a pressure on crude oil prices.

Read Here: Crude Oil Prices Stall, Will the Northward Move Continue?

The energy-hungry nations, including India, have been reaching out to the OPEC+ to ramp up its oil supplies to ease down the rising oil prices. The past 1 year has witnessed the WTI crude oil benchmark to surge from the sub-zero levels to over US$60-a-barrel levels at the moment. The increase in crude oil prices has begun to impact the fuel bill of these oil-importing nations that depend on a major share of oil imports to meet their fuel needs.

Brent Crude Oil 1-month futures Source: Eikon Refinitiv

The 15th OPEC and non-OPEC Ministerial Meeting held on 1 April 2021 via videoconferencing to decide on crude oil supplies for the months of May and June. So far, the OPEC+ members have been complying religiously to the supply cuts, but the question of the hour is - how long the disciplined behaviour would continue given the geopolitical conflicts among the member nations on various issues.

Read our coverage on Crude oil in 2020: EIA Forecasts Brent Crude Oil Prices to Average USD 34 Per Barrel in 2020

During the last month’s OPEC+ meeting, the crude oil market was surprised on the extension of the supply cuts to the month of April with some exceptions. Russia and Kazakhstan were allowed to ramp up their respective crude oil supplies marginally to support the rising demand at the moment.

Source: © Absolut photos | Megapixl.com

The OPEC secretary general, HE Mohammad Sanusi Barkindo, during the 28th Meeting of the Joint Ministerial Monitoring Committee (JMMC) on 31 March 2021, praised the efforts by the member nations to control the abundance of crude oil in the market, and also prevented the incident such as the one in last year April from happening again. The WTI crude oil futures declined to sub-zero levels last year in April.

 

 

 

 


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