(MENAFN - Kuwait News Agency (KUNA)) By Osama Jalal
KUWAIT, July 11 (KUNA) --- Record rise of oil prices on Wednesday was result of weekly withdrawal from the US crude reserves estimated at nine million barrels and other factors including geopolitical jitters, said the Kuwaiti expert Mohammad Al-Shatti.
In an interview with Kuwait News Agency (KUNA), Al-Shatti said these withdrawals tripled predictions that had been put in the range of three million barrels.
Brent Blend crude climbed USD 2.85, settled at USD 67.01 per barrel and the West Texas Intermediate (WTI) rose USD 2.60 to USD 60.43 pb.
Locally, the Kuwaiti crude oil price increased USD 1.37 to USD 65.69 pb, he said, expressing his belief that the Kuwaiti oil rate would range between USD 60 and 70 pb in the short term period.
Closure of some production terminals and key refineries in the Gulf of Mexico, ahead of a forecast tropical storm and jitters in the Arabian Gulf have also played a role in pushing the oil prices high, Al-Shatti explains.
Oil prices' bullish trend is also attributed to drop of Venezuelan crude exports from 860,000 barrels per day in June to 670,000 bpd in July, the Kuwaiti expert said shedding further light on the upward movement of the crude rates.
Al-Shatti believes there are other factors that have had some effects on the market and the prices -- such as conclusion of the G20 convention, a US-Chinese concord on margins of the conference on resuming trade negotiations between Washington and Beijing and their consensus on necessity to abstain from any move that may impact negatively on the global economy.
Sluggish universal trade, almost automatically, leads to lower demand for crude oil.
There are other contributing factors such as demand rise in the second half of 2019, simultaneously with start of operating refineries on seasonal basis, global political jitters, namely in oil producing Libya and Venezuela.
As to factors that may stem price hikes, he mentions concerns of a possible global economic slump, noticed in hefty assets' selloffs across the global financial and business markets.
Some indices that suppress prices include stagnant new demand, industrial output by key economic powers namely Germany, Japan and the US, in addition to the fact that the oil reserves of member states of the Organization for Economic Cooperation and Development (OECD) remained above the average of the past five years.
Any indices that show industrial sluggishness in the major economic powers; Germany, Japan and the US, fuel such fears, he says, noting that strategists are eagerly awaiting the US-China negotiations expected next week -- outcome of which will certainly impact on the oil markets. (end) oj.rk