Crude oil prices in the global market appear to be on the rise again. This comes at a time of renewed tensions in the Middle East, the nebulous nature of the future of the Russia-Ukraine war, and a recent development from China, that is looking to turn the tides around.
Crude Prices Increase
The crude oil prices are best understood through the prices of benchmark Brent Crude, which rose to USD 71.89 for a barrel, higher than the previous day’s settlement of USD 71.07, marking a rise of over 1.20 per cent.
The Brent crude surged past USD 70 for the first time after a slump that saw the price of crude decrease. The highest point attained by crude this year is USD 82.03 in mid-January.
The crude oil prices are best understood through the prices of benchmark Brent Crude, which rose to USD 71.89 for a barrel, higher than the previous day’s settlement of USD 71.07, marking a rise of over 1.20 per cent.
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When we look at the price of another major benchmark, the WTI index, also marked a surged. This benchmark saw its price rise to USD 68.48, compared to the previous day’s USD 67.58, marking a spike of over 1.30 per cent.
The decline in crude oil prices came to pass in late January and early February after the new Trump Administration in the US asked oil-producing OPEC+ countries to bring the prices down, by increasing production.
This is because OPEC countries, including Saudi Arabia, had cut down production in December.
Reasons Behind Surge
Now, a collection of different factors may be paving the way for this recent surge in prices.
In addition, the Chinese government has also set an ambitious growth target of around 5 per cent for 2025, furthering hope for increased consumption and, by extension, an increase in energy consumption. | Canva
The Israel-Hamas war in Palestine, which was on pause mode, thanks to a ceasefire, has now once again reignited. This further induces volatility in a global trade cycle, that is already imbalanced.
Another war, at another war front, has engendered avenues of uncertainty, the Russia-Ukraine conflict, despite negotiations has continued to lurk in the corridor of nebulousness, further pushing the global market to shore up resources, before another maelstrom.
In addition to these conflicts, China’s recent retail data has given hope, that the market is looking to mark a return. The Chinese government has also tried to target consumption in the country through stimulus. A tranche of the said stimulus was recently doled out, as the tariff war started to escalate.
In addition, the Chinese government has also set an ambitious growth target of around 5 per cent for 2025, furthering hope for increased consumption and, by extension, an increase in energy consumption.
