Crude oil prices took a dramatic turn on Monday evening and Tuesday morning, rising above $45 a barrel as the president of the Organisation of Petroleum Exporting Countries (OPEC) gave market assurance of a September rise.
Mohammad Al-Sada, who also doubles as Qatar’s minister of energy and industry, said on Monday morning that “higher oil demand is expected in the third and fourth quarters”, leading to higher prices.
He added that, since February of this year, the oil price had experienced a steady improvement following a decline in crude oil production, supply outages and a decrease in oil inventories, while the global demand for oil improved in that period.
After Al-Sada’s assurance, Brent crude, the international benchmark for oil, surged from $42 to $45.33 a barrel – nearly a three percent increase.
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West Texas Intermediate (WTI) rose by 2.9 percent to climax at $43.02.
According to OPEC secretariat, OPEC basket price surged to $41.10 a barrel, against $40.08 before Al-Sada’s sentiment.
Al-Sada earlier said that the recent decline observed in oil prices and the current market volatility is only temporary.
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“These are more of an outcome resulting from weaker refinery margins, inventory overhang – particularly of product stocks, timing of Brexit and its impact on the financial futures markets, including that of crude oil,” he said.
The minister said, the economies of major oil consuming countries are expected to improve which in turn would augment oil demand in the coming quarters, especially in preparation for the approaching winter season in the Northern Hemisphere.
The minister assured that OPEC continues to monitor developments closely, and is in constant deliberations with all member states on ways and means to help restore stability and order to the oil market.
An informal meeting of OPEC member countries is scheduled to take place on the sidelines of the 15th International Energy Forum which will take place in Algeria from 26 to 28 September 2016.
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