Crude prices stable after G20 warns of risks to growth
By Sara Israfilbayova
World oil prices on are dropping on July 23 on fears for demand for raw materials after financial G20 statements about the risks of the world economy against the backdrop of geopolitical tensions.
Benchmark Brent crude oil was up 15 cents at $73.22 a barrel, U.S. light crude West Texas Intermediate (WTI) was unchanged at $68.26, Reuters reported.
Last weekend in Buenos Aires, a meeting of finance ministers and heads of central banks G20 was held. According to its results, representatives of G20 said that the main short-term and medium-term risks of the global economy at the moment are growing financial vulnerability, growing tensions in trade and geopolitics, as well as inequality and weak structural growth.
The meeting took place on the background of an escalation of the trade conflict between the U.S. and China.
On July 21, U.S. President Donald Trump announced his readiness, if necessary, to impose duties on all Chinese imports, estimated at about $500 billion.
Oil prices are also affected by the statements of the U.S. authorities regarding Iran.
On July 23, 2018, U.S. Secretary of State Mike Pompeo described the Iranian authorities as something more reminiscent of the Mafia than the usual government.
The U.S. is not afraid to confront the Iranian regime and intend to continue to press hard on the authorities of the country and urged other countries to join this pressure.
Also, investors are puzzled by the weekly statistics from Baker Hughes, a GE company (BHGE) on the number of drilling rigs in the U.S.
BHGE reported that for the week ended on July 20, 2018, the total number of drilling rigs in the U.S. decreased by 8 units, to 1,046 units.
At the same time, the number of drilling rigs in oil fields was reduced by 5 units, to 858. The number of drilling rigs at gas fields was reduced by 2 units to 187.
The reduction in the number of installations for drilling oil wells in the U.S. turned out to be the maximum since March 2018.
OPEC and non-OPEC producers reached an agreement in December 2016 to curtail oil output jointly and ease a global glut after more than two years of low prices. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.
Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from January 1, 2017.
OPEC and its partners decided to extend its production cuts till the end of 2018 in Vienna on November 30, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.
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Sara Israfilbayova is AzerNews’ staff journalist, follow her on Twitter: @Sara_999Is
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