Are oil prices rising?
Brent crude prices in the international markets have been on the rise in the past several months. In the first four months of calendar 2019, Brent crude price has shot up by about 32%. Crude oil is in the range of $71-72 a barrel currently, and some expect it to rise further, perhaps even touching $100 a barrel.
Are they expected to rise further?
Crude prices have surged in 2019 primarily because OPEC countries cut supplies to firm up the price. They are expected to rise further because of the political crisis in Venezuela and the US tightening sanctions on Iran. As on date, Iran produces four million barrels of crude daily, and Venezuela about 2.3 million barrels. With US sanctions on the two countries, daily global supply of crude has dropped by nearly 8%. Meanwhile, Saudi Arabia and the OPEC have not shown much inclination to make up for the shortfall. US could step up its supplies, but it’s unlikely to do so in a big way, at least until prices rise beyond $80 a barrel.
