Oil Prices Continue to Rise! What Will Happen to Fuel Prices in Croatia?

Oil prices in global markets rose by approximately one percent last week, significantly less than the previous week due to the increase in Covid-19 infections worldwide, and investors are awaiting this week’s decision from OPEC and Russia regarding production quota levels in the coming months.

In the London market, the price of a barrel strengthened by 1.12 percent last week, reaching $43.24, while in the American market, the barrel increased by 0.84 percent to $40.55.

After the previous week, when oil prices jumped by approximately 4 percent, last week’s increase in oil prices was modest, influenced by the rise in Covid-19 infections that led several U.S. states to impose travel restrictions on their citizens, which could undermine the recovery in oil demand in the world’s largest consumer.

However, on Friday, oil prices rose by more than two percent thanks to an upward revision of the International Energy Agency’s (IEA) forecast for oil demand this year by 400,000 barrels per day, to 92.1 million barrels.

Oil prices have strongly recovered from the lowest levels in the last 20 years recorded in April, after OPEC and its allies, including Russia, a group known as OPEC+, reduced their production by a record 9.7 million barrels per day for a period of three months starting in May.

OPEC’s Joint Monitoring Committee will meet on Tuesday and Wednesday to recommend a new level of production cuts. OPEC+ is expected to ease production cuts as global demand and oil prices have recovered.

– The planned easing of OPEC+ production cuts next month and a potential recovery in U.S. production could strengthen supply-side pressure in that equation – notes Stephen Innes, chief strategist at AxiCorp in his commentary.

Among the significant events in the global oil market, Libya delivered crude oil to the world market for the first time in the last 6 months on Friday, after a blockade by eastern forces, but then all its exports were halted again on Sunday due to force majeure.

The Libyan National Oil Company accused the United Arab Emirates of instructing eastern forces in the Libyan civil war to reimpose the oil export blockade.

Oil-rich Libya has not had stable governance since 2011 when Moamer Gaddafi was overthrown, and it has two parliaments and two governments, with streets often under the control of armed groups and the scene of occasional conflicts.

The Government of National Unity (GNA) is allied with Turkey and Qatar, while the rival Libyan National Army (LNA) is supported by Egypt, Russia, the United Arab Emirates, and France.

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