Oil Is Falling in Price Again Amid Fears of a Recovery in Demand

Brent oil futures for delivery in August on Tuesday morning during trading fell to $ 70.87 per barrel.

Kyiv. Ukraine. Ukraine Gate – June 08, 2021 – Economy

According to Bloomberg as of 8:02, the price of futures for Brent oil fell by 0.87%.

At the same time, the price of July futures for WTI oil fell to 68.66 dollars per barrel, losing 0.82%.

Oil prices fell on Tuesday, as fears about the fragile state of global recovery in demand for oil and fuel increased due to data showing that China’s oil imports fell in May, writes Reuters.

On April 2, the Organization of the Petroleum Exporting Countries, Russia, and their allies, a group known as OPEC +, agreed to ease production restrictions by 350,000 barrels per day in May, another 350,000 barrels per day in June, and another 400,000. barrels per day or so in July.

OPEC + agreed on June 1 that it would stick to its plan to increase supplies by 2 million barrels per day and the corresponding increase in the agreement in July. The next meeting will take place in early July.

It will be recalled that the world oil market experienced a “black Monday” on March 9, 2020 – the largest sharp drop in prices since 1991 with the start of the Gulf War. After that, the oil market experienced several more price collapses – against the background of the situation with the coronavirus and restrictions due to the pandemic in the world’s largest economies, leaving the market overwhelmed by a sharp decline in demand and excessive oil surplus.

On April 12, 2020, OPEC + member countries, including Russia, agreed to reduce oil production in a pandemic.

The concluded OPEC + production reduction agreement provided for a production limit of 7.7 million barrels per day until the end of 2020. In the April OPEC + agreement, producers were offered to reduce production to 5.8 million barrels per day from the beginning of 2021 to the end of April 2022. However, the conditions changed at the meeting on December 3, 2020.

OPEC + countries, including Russia, agreed on December 3 last year to maintain the restrictions on oil production, which were in force since the spring of 2020. However, with some relaxation. Thus, OPEC + has confirmed the agreement to return 2 million barrels to the market, but the return should be gradual, taking into account the market situation. It was agreed to review the terms of the agreement on a monthly basis.