Should Drivers Worry About Fuel Prices Again? Will Crude Oil Price Go Up!?

Commodities: EU Members Manage To Agree On Price Caps For Russian Oil

The oil market has already reached its maximum production capacity and it will be hard to increase the crude supply. As a result, demand may begin to be primarily responsible for the price of oil will be.

WTI crude oil futures rose to $111 per barrel on Tuesday, rising for the third session in a row. This is likely related to reports that the United Arab Emirates and Saudi Arabia are nearing full production capacity. United Arab Emirates Energy Minister Suhail al-Mazrouei said on Monday that the country is producing close to the maximum amount of crude under the OPEC+ agreement, which is 3.168 million barrels per day. This confirmed comments made by French President Emmanuel Macron, who told U.S. President Joe Biden that the UAE and Saudi Arabia, previously seen as the only two OPEC countries with spare capacity, could barely increase oil production.

What's more, political unrest in Libya and Ecuador threatens to cut supplies further. Libya's National Oil Corp said Monday that it may be forced to declare force majeure in the Gulf of Sirte region (force majeure is invoked when parties to a contract cannot perform due to situations beyond their control) if oil terminals there do not resume operations. The trouble with oil production is also affecting Ecuador, where the energy ministry has stated that the country may suspend oil production altogether due to anti-government protests.

The situation is therefore becoming increasingly difficult as supply has less and less ability to influence the price of oil and compensate for the Russian embargo. Oil prices could therefore potentially remain at high levels for a long time. Thus, any increase in demand for this commodity could lead to increases and consequently again to a decrease in demand due to higher prices.

It is also important to note that such high oil prices come at a time when the U.S. dollar is near its highest level in 20 years. Typically, a strong dollar could mean cheaper commodities settled in it, while a weaker dollar could mean higher commodity prices. Currently, the dollar index has stabilized around the 104-point level. Recent concerns about slowing global economic growth may have supported the dollar, as the currency is widely seen as a safe haven in times of political and economic uncertainty.

Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service)

Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.

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The supply problem in the oil market is growing (

Commodities: EU Members Manage To Agree On Price Caps For Russian Oil

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