Crude prices decline

20 August 2018 18:45 (UTC+04:00)

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By Sara Israfilbayova

World oil prices are declining on August 20 amid investors’ concerns about a possible slowdown in the growth of the world economy in light of the uncertainty in China and the problems in Turkey.

Brent crude futures, a benchmark for international oil prices, were at $72.11 per barrel, up 28 cents, meanwhile U.S. West Texas Intermediate (WTI) crude futures were up 3 cents at $65.94 per barrel, Reuters reported.

Traders worry that the trade contradictions between Washington and Beijing are beginning to exert some pressure on China’s economy. So, last week official statistics were published, according to which the volume of retail sales in the country in July slowed the growth rate in annual terms to 8.8 percent from 9 percent in June.

Moreover, investors are concerned about the economic situation in Turkey. In August, U.S. President Donald Trump said that he authorized double tariffs on aluminum and steel from Turkey was in creased up to 20 percent and 50 percent respectively. This caused the collapse of the Turkish lira to the historic minimum. After that, the international rating agency S & P lowered the long-term sovereign credit rating in Turkey’s foreign currency to “B +” from “BB -”.

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