Baku, Azerbaijan, Sept.2
By Aygun Badalova - Trend:
Oil prices surged by more than 20 percent in the first half of August, driven by speculation about a potential new deal to limit production between OPEC and some major non-OPEC oil producers next month, analysts of the British economic research and consulting company Capital Economics said in a report, obtained by Trend.
The weakness in the US dollar in the first half of the month, due to some mixed economic data from the US and a subsequent scaling back of interest rate expectations, also supported oil prices, analysts said.
“However, it is worth bearing in mind that the US dollar only fell by about two percent in the first two weeks of August, whereas oil prices rose by almost 20 percent. Prices fell back towards the end of the month due to a combination of some recovery in the dollar and the market becoming more sceptical of the chances of any agreement to limit output,” analysts added.
They also noted that the number of rigs drilling for oil in the US continued to rise in response to the previous increase in prices.
There are also valid concerns about growing stocks in the US, which have risen recently when they would usually be expected to fall, which helped to drag down prices towards the end of the month, analysts said.
Crude oil prices were pushed higher Friday by bargain-hunters in Asia trade, but prolonged oversupply and a stronger greenback were setting the global oil market up for its worst week since January, the Wall Street Journal reported.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at $43.54 a barrel at 0634 GMT, up $0.38 in the Globex electronic session.
November Brent crude on London’s ICE Futures exchange rose $0.33 to $45.78 a barrel. Week-to-date, both benchmarks were last down nearly nine percent, the biggest slump since the week of Jan. 10, when prices dropped 11 percent.