In March, the price of oil fell to 18-year historical lows. The so-called “oil war” between the three major players in the global oil market of Saudi Arabia, Russia and the United States of America continued. The coronavirus pandemic in the world exacerbated the situation, significantly affecting the decline in activity of the world's leading economies.
On March 30, the price of May futures for West Texas Intermediate (WTI) fell by 5.85% - a barrel of WTI was trading for $20.32.
Oil recovered on March 31 after US President Donald Trump and Russian President Vladimir Putin agreed to stabilize energy markets.
On April 6, oil prices fell again after Saudi Arabia and Russia postponed a meeting where production cuts had to be discussed, which could partially reduce oversupply on world markets, as demand was falling due to the coronavirus pandemic.
On April 20, the price of US WTI oil has fallen below $15 for the first time since 1999. And on April 22, the cost of a barrel of Brent crude oil fell below $16.
On April 26, amid fears that a decline in production would not be able to offset the sharp decline in demand, the price of WTI and Brent oil was falling again. WTI futures for June at the New York Mercantile Exchange (NYMEX) decreased by more than 25% - to $12.69 per barrel. June futures for Brent on the London ICE Futures exchange by this time fell by 7.2% and were trading at $19.9 per barrel.
In May, the cost of Brent crude for July rose by 1.83% to $33.44, according to trading data on the London ICE. The price of July futures for WTI American crude oil rose by 2.91% to $30.38 per barrel.
On June 1, a month after the signing of the OPEC deal on the reduction of oil production, it became known that there is disagreement regarding the possible continuation of the agreement – between Saudi Arabia on the one hand and Russia on the other.
On June 6, OPEC+ countries agreed to extend the deal to reduce oil production by another month – until early August.
But concerns about slowing demand, an increase in coronavirus infections, record US oil reserves and forecasts that it will take years to recover from COVID-19 have again affected the decline in oil prices. On June 11, oil prices fell by more than 3%. Futures on WTI fell by 3.96% to $38 per barrel. Futures for Brent crude oil declined 3.55% to $40.25 per barrel.
Last week, July 6, it became known that September Brent futures rose in price on the London ICE Futures exchange by $0.31 (0.72%), to $43.11 per barrel.
August futures for WTI rose by this time in electronic trading on the New York Mercantile Exchange (NYMEX) by $0.29 (0.72%), to $40.53 per barrel. For the previous session, the contract fell by $0.83 (1%), to $40.24 per barrel. On Friday, the main trading on the NYMEX was not held due to the weekend in the United States. Over the past week, both contracts have risen in price by more than 4%.
At the end of July, the OPEC+ deal on a reduction in production by a record 9.7 million bpd expires; from August, the volume of reduction should be 7.7 million bpd. The next meeting of the OPEC+ JMMC is scheduled for July 15.