Analysts explain that the market’s reaction is based on anticipation. The increase, lead by the petroleum type Brent from the North Sea which has already broken through the 100 dollar per barrel barrier, typifies the panorama of the market in its current state.
Analysts explain that the market is waiting with bated breath to see how the situation develops, largely for the possible repercussions in other countries of the Middle East and North Africa, where more than a third of all crude oil is extracted.
The Secretary General of OPEC, (Organisation of Petroleum-Exporting countries) Abdalá al-Badri, predicts that tensions in Egypt could affect the strategic crossing of the Suez Canal and result in fuel shortages.
He indicated that if these predictions came true, OPEC would increase production. Although up until now the organisation had not thought it wise to expand its volume of production to control the growth in importation, the ongoing events in the African nation continue nearby.
In the last few days, Abdalá al-Badri confirmed that the current demand in the crude oil market is covered and that the rise in value is purely a consequence of speculation.
The Saudi-Arabian Minister Ali al-Naimi, expressed his anxiety over the pressure exerted upon the market by speculators.
For this reason, he stressed the importance of considering the availability of stocks in order not to affect the balance between supply and demand.
On the other hand, the chief economist of the International Atomic Energy Agency (IAEA), Fatih Birol, holds the opinion that 100 dollars per barrel would be damaging to the global economy. He suggests that once this barrier is broken, oil-importing developing countries will suffer greatly, as the asking price would reach levels akin to those in 2008, at the height of the crisis.
He explained that although this rise is the main driving force for the demand for and investment into energy, uncertainty persists over the strength of the recovery, primarily in Europe and the United States. PL
(Translated by Elly Greig – Email: email@example.com)