The prices of oil stayed stable on Monday, recovering the previous losses since the major oil investors took global economic stock pressure which is highly likely to affect the demand for oil. According to the current sources, the Brent crude oil prices came down to $59.41 per each barrel this Monday.
Investments in crude oil and other commodities have always been the talk of the town. After all, it helps investors diversify their portfolio by investing their savings in a different range of commodities.
The abundance of global oil supply signs, as well as the fear of Chinese economic development, resulted in lower crude oil prices on Monday. China is the world's largest importer of crude oil. However, the current fight between China and the United States can have a negative impact on the prices of crude oil. The weaknesses in global crude oil rates provide the users with a clear scene of global energy demand, which is slowing down lately. These changes in the price have been mainly occurred due to the decelerated trading as well as manufacturing. According to the experts, this slowed down manufacturing and selling does not seem to end anytime soon. However, if these problems continue in this sector, there is a high chance of a major weakness in the crude oil price in the near future.
The top and world's largest manufacturer and supplier of crude oil i.e. Russia clarified that the country could not fulfill its supply reduction commitment in the previous month. This happened because of the rise in natural gas condensate output since the nation is getting ready for the upcoming winter season.
Russia and OPEC (the Organization of the Petroleum Exporting Countries) including some famous oil manufacturers and suppliers, had come to an agreement in December. This alliance decided to decrease the supply of Crude oil by 1.2 million barrels a day from the beginning of 2019. In addition to that, a discussion between Saudi Arabia and Kuwait regarding the increase in oil production (with a volume of up to 50,000 barrels of oil per day) will result in more oil coming to the market. According to Kuwait Deputy foreign minister, Kuwait and Saudi Arabia had started to produce oil from the oilfields. However, both countries have to consider the OPEC and Russian oil reduction agreement before producing oil.
According to the experts and market participants, the Organization of the Petroleum Exporting Countries is likely to continue the production cuts. As far as the current crude oil demand is concerned, OPEC and other major oil producers and suppliers should lift the supply and production cut from oil. Investors and market participants are eagerly waiting for the upcoming meeting (which is supposed to be held in December 2019) to know the final decision.
One of the major challenges for OPEC and other oil-producing countries is the slowdown in Chinese market growth this year. Furthermore, the war between China and the United States is causing more problems.