Brent crude dips after hitting three-years high level

September 29, 2021 02:38 PM AEST | By Arpit Verma

Brent crude dips after hitting three-years high level — Image source: Copyright © 2021 Kalkine Media

Crude oil dynamics

A power crunch in China, the world's biggest energy consumer has also contributed to the current fall in crude oil prices. The country targets to reduce its carbon emission levels by limiting its diesel usage for power generation.

However, the oil demand is expected to grow sharply in the next few years as economies are making a strong recovery after the COVID-19 pandemic.

Reduced production from OPEC

Reduced production from OPEC | Source: © Gumpapa | Megapixl.com

Several OPEC countries along with its allies like Russia and others squeezed their output during pandemics and have been struggling to ramp up their production amid a recovery in global oil demand. OPEC members cut their production during pandemics because of the lower energy demand and to remove the oil glut from the market.

Adding to that, the disruptions caused by two storms in the US Gulf Coast during August and September have also disturbed the global supply, pushing oil prices higher.

Leading market analysts including Goldman Sachs have raised their Brent Crude oil forecast for 2021 by US$10 per barrel.

Bottom Line

Brent Crude oil prices dipped after hitting three-year high levels as demand dampens in China amid an ongoing power crunch.

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