OIL PRICE RISES ABOVE $80/BARREL, THE HIGHEST IN THREE YEARS
The price of commodities keeps soaring as the world economy reopens after the pandemic. Brent Crude oil, one of the most essential commodities in the world, has seen a massive increase in its price after the pandemic. The price of oil has soared by over %250 since it hit its lowest price of $16 in almost two decades, according to data received from TradingView.To get more news about
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Goldman Sachs, a Global Investment Banking Company, predicted the price of oil to rise to $80 before the end of the third quarter. The prediction was made in May 2021, when the price of oil was averaging $65 per barrel. And just as predicted by the Investment Banking Company, Brent Crude Oil hit the $80 mark on the 28th of September before closing at $78.16. Price has gone beyond the $80 mark, as the fourth quarter begins, rising to $83 per barrel.
The increase in the price of oil is a result of the increase in the demand for oil around the world, as the economy reopens after the pandemic. However, the struggles of the Organization of the Petroleum Exporting Countries, OPEC, to pump more oil to meet rising demand caused the major surge in the price of oil.
The Organization of the Petroleum Exporting Countries and allies or OPEC+ as the alliance is known, have fallen short in the production of oil to meet global demand as it recovers from the coronavirus pandemic.
“Several OPEC+ members such as Nigeria, Angola, and Kazakhstan have struggled in recent months to raise output due to years of under-investment or large maintenance work that has been delayed by the COVID-19 pandemic.” Reuters
“Cheating and producing above targets have traditionally been one of OPEC's main problems but the situation has changed in recent years as investment has flowed into the renewables sector as part of the energy transition.” Reuters
“Despite the rise in renewables, the world is still consuming near-record amounts of crude, which will put additional pressure on Saudi Arabia and OPEC's other leading Gulf producers to pump more oil in the years to come.” Reuters
In May, OPEC planned to increase oil production by 500,000 barrels per day for the rest of the year, but the inability of some members to raise output to agreed levels suggests a supply gap could develop as the group proceeds with a plan for monthly output increases to unwind the rest of record supply cuts made in 2020. And this could increase the burden on top producers like Saudi Arabia if demand starts to recover and exceed pre-pandemic levels, which forecasters say could happen as soon as the second quarter of next year.
