A. Harikumar
March 15. Oil prices plummeted early today with price of Brent, a variety of crude considered as global benchmark, trading at 98.27 a barrel. This is the first time after February 28 that oil is trading below $ 100 a barrel. West Texas Intermediate (WTI) a US benchmark crude variety traded at $ 94.22 by mid-day.
Speculators who raised the prices in the market are reported to have left the market following a slew of new developments leading to fall in prices. The new developments are apprehensions about a fall in China’s demand for crude and possibility of Iran nuclear deal. China is experiencing a return of Covid pandemic and lockdown has been imposed in a few cities. This has raised fears of a slowdown in oil demand.
If a deal is reached with Iran regarding allowing inspecting their nuclear facilities, the present embargo on export of oil and natural gas by Iran will be lifted and it could ease the shortage in supply in the market following Russia-Ukraine war. Meanwhile there have been reports that Saudi Arabia, the largest exporter of crude and UAE, another major exporter will increase production, thus easing supply shortage. Russia is the second largest exporter of Oil and war has affected the supply of oil from Russia.
Oil prices had leaped above $ 139, a barrel a week ago sparking fears that the prices would touch $ 150 and then $ 200 a barrel if war continues. However markets are currently proving volatile and this is causing investors who trade in oil market take profit and leave for the time being resulting in a free fall in prices.
