LONDON: Oil prices have dropped by a quarter since June and could fall further if a nuclear deal is reached with Iran as it would bring more crude to the market, yet inflation remains stubbornly high.

Crude prices soared to $140 per barrel in early March after Moscow invaded Ukraine, raising fears that Western sanctions would drastically cut supplies from Russia, a major producer and exporter.

But traders are now concerned about demand due to various factors, including fears of recession, a strong dollar and weak Chinese oil imports during the country’s Covid lockdowns, said Giov­a­nni Staunovo, commodities analyst at UBS bank.

Oil prices are set in dollars, so any rise in the currency makes barrels more expensive for importers using other currencies.

In China, “oil demand has taken a hit as processing of crude imports were weak in July” although stockpiles still rose, said Geordie Wilkes, analyst at Sucden.

The price of Brent, the international benchmark, has dropped to $95 while WTI, the main US contract, is at around $90 — and fuel prices at the pump have fallen in the United States.

But UBS expects Brent prices to climb back to around $125 by the end of the year as Russia exports fall, Chinese imports rise and Western countries stop tapping their strategic reser­ves, Staunovo said.

Published in Dawn, August 19th, 2022

Opinion

Editorial

Delay in the offing?
Updated 03 Feb, 2023

Delay in the offing?

Govt must realise that political stability in the country cannot be achieved by extra-constitutional actions.
Divisions in PML-N
03 Feb, 2023

Divisions in PML-N

DISCORD and drama in PML-N ranks escalated this week when Shahid Khaqan Abbasi revealed he no longer holds a party...
Wikipedia ‘downgrade’
03 Feb, 2023

Wikipedia ‘downgrade’

ATTEMPTS to police the internet by states, often by giving opaque justifications for the action, are never a good...
Mianwali raid
Updated 02 Feb, 2023

Mianwali raid

The military needs to share intelligence with civilian agencies to neutralise the militant menace nationwide.
Corruption unlimited
02 Feb, 2023

Corruption unlimited

PAKISTAN’S consistent slide on Transparency International’s Corruption Perceptions Index over the last several...
Women police officers
02 Feb, 2023

Women police officers

IN a heartening development, a second female police officer has been appointed as DPO in Attock, weeks after the...