The expert described the three events that can bring the price of oil to increase

© AP Photo / David ZalubowskiДобыча of shale oil in the United States. Archival photoThe expert described the three events that can bring the price of oil to increase© AP Photo / David Zalubowski

Three events, two of which depend on the United States, one from OPEC+, can return the oil prices to increase, said the RIA Novosti expert energy Centre of Moscow school of management SKOLKOVO Catherine Grushovenko.

«Oil prices may start to rise if the United States will enforce sanctions against Iran in full — now, after the introduction of indulgences, we can say that sanctions have failed. Prices can be affected by the decision of OPEC regarding production cuts (the meeting will take place on 5 December). On the demand side, the oil can be supported by the cessation of the tariff wars between the US and China that will have a positive impact on economic growth», — said Grushovenko.

The price of Brent back in the summer of 2017 dropped to $ 45 per barrel, but then began its recovery, largely due to the accumulation effect of the transaction OPEC+ reduction of production, and in the spring of 2018 it is firmly entrenched above $ 70 dollars.

And since mid-August the Brent price rose almost non-stop, adding to the price of six month of 16 dollars, or about 23%, and surpassing the 3 October level of $ 86 for the first time since November 2014. The trigger for this growth was the expectation of the entry into force in early November, the U.S. sanctions against Iran, which States threatened to reduce to zero the export of oil from the country. However, Washington did relief for a number of major buyers of Iranian «black gold» and the market finally focused on the factors indicating a possible oversupply of oil in the world.

Among these factors an important role is played again, the United States, and twice — as a major oil producer, stepping up production, and as the initiator of the «trade war» with China, which is causing investors concerns of a slowdown in economic growth and, consequently, reduce the demand for oil. For its part, OPEC’s November report made a oversupply in the oil market in 2019, but its future actions not yet determined. Organization and overall OPEC+ will make the decision to cut production at the meeting in Vienna on 5-7 December.

Meanwhile, crude oil drops more precipitously than it rose in price. On Friday Brent for the first time since 3 November 2017 fell below $ 61 a barrel. So for a little over a month and a half since reaching a peak on 3 October, it fell to $ 25, or 29%.

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The expert described the three events that can bring the price of oil to increase© Infographicsrussia forces in the world oil market