The United States' president Donald Trump has been insisting that the Organisation of the Petroleum Exporting Countries (OPEC) increase the output of crude. However, despite his insistent demands, Saudi Arabia and Russia decided to not hike the crude output.
However, even as there were fears that there could be a backlash in the global crude prices, these fears never materialised as the prices shot up significantly by 2%, to a four-year high. Benchmark crude price rose to a per-barrel cost of $80.94, a high going back to 2014 November.
In terms of percentages, this came to about an increase of 2.7%. The price slightly fell down to a per-barrel cost of $80.65. According to Carsten Fritsch, an analyst at the German-based Commerzbank, "This is the oil market’s response to the OPEC+ group’s refusal to step up its oil production."
Earlier, Trump's statements that the OPEC was influencing the prices of the global crude was met with stiff resistance from both the Iranian and Russian representatives who had attended the Joint Ministerial Monitoring Committee (JMMC) in Algiers on Sunday.
The Russian energy minister had also fuelled speculations through his statement that the country could hike the production of crude before this decision was eventually taken. On his part, the Saudi Arabian energy minister Khalid al-Falih had also refuted Trump's statements and had added, "I do not influence prices."
Meanwhile, analysts are expecting that once the United States' sanctions are imposed on Iran in November, the prices of crude (Brent crude) will shoot up further, to at least $90 per barrel by December and could even cross the $100-mark per barrel early-on in 2019.
On the other hand, with internal economic crisis sharpening in Venezuela, another crude producer and sanctions being imposed on Iran, it is also expected that the crude supply will have a shortfall. As such, Harry Tchilinguirian, an oil strategist at the BNP Paribas commented, "It is now increasingly evident, that in the face of producers reluctant to raise output, the market will be confronted with supply gaps in the next three-six months that it will need to resolve through higher oil prices."