The recent rise in oil prices around the world is due to an increase in fuel demand after the coronavirus lockdowns ended as many people took the COVID-19 vaccination, said two Kuwaiti oil analysts.
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In separate statements yesterday, the analysts noted that OPEC Plus succeeded in maintaining a balance between oil offer and demand, leading to a rise in prices.
The international rise in oil prices earlier this year was thought to be temporary, however, OPEC, led by Saudi Arabia, the UAE, and Kuwait was able to maintain these prices with the OPEC Plus group, professor of oil engineering at Kuwait University Dr Ahmad Al-Kouh noted. OPEC Plus maintained prices by decreasing the amount of offered oil in the markets, he added. Maintaining prices around $65 per barrel until the end of 2021 would be a big achievement for OPEC Plus, Kouh also said.
In the meantime, analyst Jamal Al-Gharaballi said there are positive signs of recovery in the world economy, with the decrease in COVID-19 cases and the OPEC Plus’ agreement on limiting oil production to specific rates.
He noted that there are positive improvements in the US-Iranian file and expectations that Iran would export extra amounts of oil. In order to face this increase in Iranian exports, OPEC Plus might decrease the number of other countries, mainly Saudi Arabia, Gharaballi said.
Meanwhile, the analyst said there are expectations of an increase in demand for oil by six billion barrels per day in the second half of 2021. However, concerns over the rising coronavirus cases in India and Brazil could affect the increase, he added. Moreover, Gharaballi expected oil prices to reach $80 to $85 by end of the year.
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