Oil on the rise – archyworldys was electricity invented during the industrial revolution


The new US sanctions that will affect Iran’s energy industry and the economic collapse of Venezuela Fears that global oil supplies become significantly scarcer increased, sending prices above $ 80 a barrel for the first time since 2014. Brent crude rose even before Donald Trump made the announcement of the US withdrawal from the nuclear deal and re-imposed restrictions on Iran’s oil exports earlier this month, with prices rising more than 40% compared to last year. But the prospect of fewer barrels from Iran and Venezuela meant that Brent rose, just in May, more than $ 5 per barrel, from $ 75 to $ 80. Those pressures, together with the production cuts that agreed to the OPEC Y Russia , and a strong consumption of Petroleum , convinced some investors that prices could reach higher levels. For the first time in four years, oil reached a record high level due to the tightening of supplies and strong demand. “Geopolitics undoubtedly plays a role in maintaining that price rebound, but the key events represent real losses of supplies, not just risks that may not be realized,” says Richard Mallinson of consultancy Energy Aspects. WE RECOMMEND YOU: Oil rises against risk outlook for sanctions on Iran Venezuela’s supplies fell faster than analysts expected, as economic and political crises took over the energy sector, with a series of court orders authorizing the seizure of assets and the blockade of exports. In addition, some investors relied on a revitalization of Iran’s oil industry with the backing of Western investment to modernize its infrastructure, increasing global supplies. But the threat last week by the French company Total, when it withdrew from Iran, made that scenario unlikely. Iran needs more than $ 100,000 million in foreign investment and technology to expand its long-term oil and gas industry.

While prices may fall, Mallinson says the oil market is witnessing “a structural shift toward higher prices” that will continue until next year. Last Thursday, the Brent, the international reference, rose more than $ 1.10 to reach a maximum of $ 80.50 per barrel, the highest price since the end of 2014, while the West Texas Intermediate , the US reference, rose to 72.30 dollars per barrel. It was expected that the increase in the supply of shale deposits in USA , which reached 10.7 million barrels per day, will fill any gap in global supplies, but the industry faces restrictions on pipelines and infrastructure bottlenecks, which limits the speed of exports. Some analysts at Bank of America have returned to $ 100 per barrel. This raised questions about whether OPEC producers will decide to abandon the supply reduction agreement that has been in effect since last year. “What everyone has to face is when OPEC and its allies will intervene,” says Helima Croft, global head of commodities strategy at RBC Capital Markets . Saudi Arabia , the de facto leader of OPEC, says he will work with other producers to alleviate any supply shortages. WE RECOMMEND YOU: Venezuela buys crude abroad to subsidize Cuba But the energy ministry says the kingdom is reluctant to open the taps for fear that it could cause further price falls. Last Thursday, in a statement from the Ministry of Energy of Saudi Arabia They recognized the recent volatility of prices, but it was said that the world had a “wide offer” available. Some industry experts believe that higher oil prices could become counterproductive, as the consumer receives the blow. Last Wednesday, the International Energy Agency it revised downwards its projections of growth of world oil demand for the year 2018, from 1.5 million barrels per day to 1.4 million barrels per day. The shares of energy companies recovered this quarter after a strong improvement in cash flows and profits. The MSCI European Energy index, which is made up of companies including Royal Dutch Shell and Eni, which rose 15% since the end of March. The S & P 500 Energy index also had a gain of 15% during the same period. “The cost savings are still coming … but now they coincide with the increase in prices. That combination is very powerful, “says Martijn Rats, global oil strategist at Morgan Stanley.