Increased Brent price for August, up by 1.14%, sets new figure at $64.63.
Oil prices soared at the start of the week, with the North Sea Brent surging 3.9% to trade at $63.94 per barrel, thanks to the escalating geopolitical tension between Russia and Ukraine.
The climb in oil prices began amid reports of a Ukrainian drone attack on Russian territory, heightening concerns over stability in oil supply. However, despite the rising tension, global oil supply is anticipated to increase, potentially easing some of these worries.
Fiona Cincotta, a Forex market analyst, attributed the price increase to the ongoing tensions, stating, "The market can only maintain the price surge as long as the tension between Russia and Ukraine persists."
In a move expected by the market, OPEC+, made up of OPEC members and allies like Russia, announced a production increase of 411,000 barrels per day in July, marking the third consecutive increase of this magnitude. This brings the total production increase over four months to 1.37 million barrels per day – more than half of the 2.2 million increase targeted.
Despite the production hike, some analysts believe that the market would have seen an even steeper decline had OPEC+ decided on a larger quantity. Harry Tchilingurian of Onyx Capital expressed this view on his LinkedIn account, stating, "If OPEC+ had chosen to increase production by a larger amount, the opening price would have been extremely unfavorable."
For those interested, read more about the Brent oil price rise following OPEC+'s decision to increase production in July. Remember, while geopolitical tensions and OPEC+ production decisions might impact oil prices, analysts expect Brent oil prices to tumble, averaging around $64-$65 per barrel in 2025 before further declines to $58-$60 per barrel in 2026. Keep an eye on global economic growth and unexpected increases in oil output, as they can potentially sway these forecasts.
The ongoing tension between Russia and Ukraine, as well as the production increases announced by OPEC+, are shaping the trajectory of the energy industry's finance sector, particularly the oil-and-gas market. Fiona Cincotta, a Forex market analyst, highlighted that the market can only maintain the price surge as long as the tension persists.
