According to statistics from the FT, a barrel of Brent crude is currently trading at $78.47, having fallen 0.78% on Wednesday. Earlier in the week, the price went over $80 for the first time in three years, having increased 92.38% in the last year. According to the FT, the 52-week range lies between $35.74 and $80.75.
CNBC reports that the price increases were due to a paucity of supply allied with increased demand. A note to clients on Tuesday from Barclays analysts said: “A persistent supply deficit is leading to an ever tighter oil market, with OECD inventories likely to end the year at the lowest level of demand cover in decades.”
CNBC placed the price increases within the context of the pandemic. It wrote: “In April 2020 as the pandemic sapped worldwide demand for petroleum products, briefly sending WTI plunging into negative territory, producers implemented historic output cuts. OPEC and its allies removed nearly 10 million barrels per day from the market, and while the group has slowly opened the taps, the members are still holding back production.”
‘Voluntary production adjustment levels’
The rise in the price of Brent crude has mirrored that of the OPEC basket price, which has risen unsteadily from $73.85 from the end of July to $78.05 today, and has climbed from $41.47 since the beginning of last year.
Developments in the price of oil were one topic discussed by the Joint Technical Committee of OPEC this week. The committee met by video conference to discuss the oil market developments.
HE Mohammad Sanusi Barkindo, OPEC Secretary General, in an accompanying statement, said: “As we approach the final quarter of 2021, it is clear that this has been a year of recovery. The commitment by all DoC Participating Countries to reach their voluntary production adjustment levels and ensure that compensation volumes are met is contributing to the positive market momentum we are seeing this year.”
The increase in prices has been met politically, with the Biden administration saying that it was working to reduce prices. Jen Psaki, the White House Press Secretary, told reporters: “I would assure you we’re not only engaged with OPEC, we’re looking at every means we have to lower gas prices.”