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Oil Flat for the Week Amid Supply Concerns

June 8, 2018 at 15:24 by Matt Jackson

It’s been a turbulent week for oil prices, posting major gains and losses over the course of five trading days. Supply concerns have been the major driving factor, and mixed results on Friday’s trading means that weekly prices look set to end roughly even to the start of the week.

Price movements have primarily been dictated by OPEC and, specifically, the question of whether they are likely to remove the supply restrictions they have placed on the commodity, or not.

The market has long questioned whether OPEC nations would increase their output levels, in light of the restrictive sanctions due to be set against Iran and Venezuela, which would lead to supply disruption. It is widely known that Saudi Arabia would be happy to see oil rise to $100 per barrel, but the news has reported that they are considering increasing their production levels in order to meet the shortfall that the sanctions would cause.

On Tuesday, it emerged that the USA had asked Saudi Arabia, unofficially, if they would increase their output to help meet the summer rise in demand. On Wednesday, Venezuela was the main storyline. Come Thursday, rumors were circulating that OPEC had decided that they would not lift the supply restrictions.

Although prices look as though they will remain flat compared to the beginning of the week, this is currently a sign of uncertainty regarding what will happen with Venezuela, Iran, and OPEC overall. OPEC, and Russia, are set to meet on June 22, and discussion will almost certainly come round to the decision of whether they should increase supply levels or not.

Prices for Friday are mixed. WTI crude prices are up 0.03% at $65.97 while Brent crude prices are down 0.87% at $76.65 per barrel.

If you have any questions and comments on commodities today, use the form below to reply.

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