Oil prices tumbled on Monday, down one percent due to increased supplies by the top exporter Saudi Arabia and slowing down economic growth in Asia which resulted in decreased demand and increase supply.
Brent crude oil futures were recorded at $78.16 per barrel at 0316 Greenwich Mean Time (GMT), which was down by $1.07 almost 1.35% from their last close.
Moreover, US West Texas Intermediate crude futures were also down by 94 cents or 1.3% recorded at $73.21 per barrel, however, the crude futures were on the rise for the last week by 8 percent.
Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference…Prices to high! He has agreed!
— Donald J. Trump (@realDonaldTrump) June 30, 2018
President Donald tTrumptweeted about the oil turmoil and rising prices, he said that he spoke to Saudi king in order to ramp up oil production due to problems in Iran and Venezuela and rising prices of oil. The Saudi king has agreed to Donald Trump’s demands, in the next few months Saudi Arabia would jack up its oil production which will bring the oil prices down hopefully.
However, Saudi Arabia’s oil output is increased by 700,000 barrels per day (bpd) from May, according to Reuters Survey. The oil production is now close to its record high of 10.72 million bpd from November 2016, but supply cuts by OPEC and some other suppliers like Russia have strangled the world oil market since 2017, similarly, unplanned disruptions from Canada, Libya, Venezuela and Uthe S planned sanctions one of the major exporters Iran has sparked supply shortfalls.
Trouble is still there
Despite, a new promise by Saudi Arabia and its supply relief, the oil market is still tense due to escalations between the US and other world economies like China, European Union, Canada, and India. Asia has the major economies Japan, China, South Korea, they all reported their slowdown export orders in June due to this escalation.
Oil markets are also keeping an eye on the impact of sanctions the US is trying to impose on Iran.
The oil prices may get little relief in the coming days but Saudi Arabian and US oil production are not enough to keep the prices down.
Oil Prices in Pakistan
Oil and Gas Regulatory Authority (OGRA) in Pakistan has recommended the price hike by Rs7.54 per liter. The government has approved the recommended oil prices and implemented for the month of July, the petrol price currently in Pakistan is Rs99.50. The government has also increased the hi-speed diesel price by Rs14 making it Rs119.31 per liter.
However, the hike in oil prices in Pakistan is unjustifiable; the global oil prices are not decreasing due to increased Saudi and US output. But increasing dollar price is making the oil expensive to import.