Oil prices have increased due to a potential drop in US crude production growth, even though increased output from Russia and Saudi Arabia’s possible plans to reduce selling prices served to control the prices from inching up further.
Furthermore, the market has been cautious due to China’s announcement last week to impose additional tariffs on 128 products from the US. This announcement has increased concerns over a trade dispute between the major world economies that could impact global growth itself.
Brent crude futures increased by 47 cents to reach at $68.11 a barrel, while West Texas Intermediate futures grew 39 cents at $63.40 a barrel, reported Reuters.
Julius Baer head of commodities and macro research Norbert Ruecker was quoted by the news agency as saying: “For oil, politics drives the market noise with the trade dispute and the geopolitically more hawkish US Government pushing prices either way.”
In January this year, Brent touched an all-time high, reaching $71.28 a barrel, however, it has struggled to cross this mark since then.
Furthermore, top exporter Saudi Arabia plans to drop prices of crude grades sold to Asia in May. On the other hand, Russia’s output has touched an all-time high in 11 months.
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These two top exporters led to the ongoing efforts of the OPEC and its allies to reduce output to push up the prices.
Fuel inventory data due from the American Petroleum Institute is expected to be released later today and there are signs of a potential drop, contrary to the last two years when oil production has increased by almost 25%. It crossed ten million barrels per day, even beating top exporter Saudi Arabia and almost touching the levels of Russia, the biggest producer that generates around 11 million barrels per day.