Government advisor expects oil to recover after record drop, explains reasons
Government advisor expects oil to recover after record drop, explains reasons
2024/08/09
The financial and economic advisor to the Prime Minister, Mazhar Muhammad Salih, expected a recovery in oil prices after a rapid decline in global markets in recent days.
Saleh told Al Furat News Agency that “the drop in oil prices will cause a huge loss in the investments of American oil companies operating in the field of extracting shale oil if global oil prices fall below $70 per barrel, which will cause their operations to falter.”
He noted that “the American monetary policy is expected to inevitably move towards an expansionary policy to confront the current recession, led by the quantitative easing policy through the possibility of the Federal Reserve reducing interest and stimulating liquidity to confront the challenges of the deterioration of the American economy and providing the necessary protection for financial investors in particular against the collapse of financial markets, including futures markets operating with crude oil contracts.”
Saleh explained that “all of these factors will shorten the paths of the decline in the oil asset cycle so that oil markets can recover, if that cycle occurs and leads to a deterioration in oil prices.”
Oil prices rose today to $79 per barrel after Brent crude fell on Monday to its lowest level in seven months, following the decline in global stock markets.
Futures are set to snap a four-week losing streak, with Libya’s biggest oilfield shut down, U.S. stockpiles falling for a sixth week and Ukraine’s incursions into Russia adding to the rally.
Meanwhile, demand for jet fuel is improving in China, a rare bright spot after months of bearish signals, including data this week showing the world’s biggest crude importer took in the fewest barrels in almost two years in July.
alforatnews.iq
