Oil Prices to Go Up as OPEC Drops Supply

A report by Barron states that reducing supply of oil from Organization of Petroleum Exporting Countries (OPEC) could raise the price of oil by about US$60 per barrel. This rise will be a result of growing demand for oil across the world. The report states that oil prices were already at US$100. The decline in recent weeks was just about US$44 for Brent crude, an international standard. The author of the report states that the phenomenal rise in the demand for oil will be a result of emerging economies in Asia Pacific.

India and China Remain Key Contributors to Oil Demand

The soaring demand for oil for transportation, production, and manufacturing activities is likely to have major impact on the overall market and the price of oil. As of 2017, the demand was oil has been recorded at 97.3 million barrels a day, which is a significant rise from 96 million in 2016. India and China are estimated to be key contributors to the overall market. To make matters worse, the supply of oil has dropped by about 0.7 million barrels a day is expected to make a serious spike in the prices of oil by the end of fourth quarter of this year.

The start of this year saw a significant decline in the oil inventories and the trend is likely to continue all throughout the year. The rise in crude oil prices is expected to be about US$60 and not more with an exception of any major political disruptions from oil-producing countries.