According to oil experts who spoke to TASS on Wednesday, the price of Brent oil plummeted by more than 7.5 percent and went below $68 per barrel a day after the OPEC+ ministerial conference, at which the participating nations agreed on new criteria for the pact.
The decline in prices, on the other hand, is linked not so much to OPEC+’s choices as it is to the financial markets collapsing with worries of the Delta coronavirus strain spreading.
Simultaneously, oil prices will stay stable at $60-70 per barrel and are unlikely to go below that level, because a fresh wave of morbidity is not very likely to trigger another lockdown. Brent oil prices fell more than 7.5 percent on Monday, July 19, dropping below $68 per barrel and losing over $5 per barrel. Brent failed to reverse much of its losses on Tuesday, and is now trading around $68-69 per barrel.
The agreement by OPEC+ to boost baseline oil output for several nations starting in May 2022 increases concerns about a market surplus, but it’s hard to tell for sure what caused the price drop, according to Vasily Tanurkov, head of ACRA’s corporate ratings branch.
Tanurkov has the same Brent price estimate as he does. Despite the development of the coronavirus Delta strain, he believes that oil will remain over $60 a barrel for a long time. Since the oil industry observed that there was already a coronavirus wave at the end of the year (autumn 2020 – winter 2021), and the economies did not close, the collapse of economies and a subsequent fall in demand are improbable.
In today’s society, immunization rates are already fairly high. This is notably true in Europe and the United States, however China also has a high immunization rate, he noted. As a result, it is unnecessary to wait for another round of lockdowns, at least in the range of April to May 2020, Tanurkov added.
