Jun 23, 2019, 3:06 PM
News Code: 83366218
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Oil prices in a week of ebb and flow

Tehran, June 23, IRNA – Oil which experienced a week of declining prices, underwent a hike in the past few days following an escalation in the Middle East. The increase in the crude prices is regarded the biggest since the beginning of this year.

The prices that seemed to be insensitive to the region's developments rose on Thursday in reaction to the US drone violating Iran's air space.

The growth came after a contraction of prices as low as 60 dollars per barrel, and amid the warnings of energy experts that the crude's price might undergo further decrease should it cross the cut-off of 50 dollars per barrel.

The developments of Thursday, however, mitigated the concerns on the oil prices fall to some extent, and boosted hopes on having a hundred-dollar oil in the market.

A drone on Thursday morning was shot down after it entered Iran's air space. It made the oil prices rise over 5 percent on the same day. The US claimed that the drone had not violated the air space, rather it was flying over the international waters. Tehran, on the other hand, said that the wreck of the drone fell down in Iran's territorial waters. It was put on display after it was collected from the water.

 Although the US escalation remained limited to rhetoric, some American officials spoke of an imminent military attack on Iran, which was not turned into action.   

Notwithstanding, oil prices welcomed the reports to push the price of Brent oil over 65 dollars per barrel on Friday.

The Brent added 4 percent of growth to end the week at 64.45 dollars per barrel. The US benchmark oil, however, rose to a record of 57.43 dollars showing a 9.3 percent growth.

The might of the news was so huge that sparked a high growth despite weakening factors in the market, such as an increase in production and export of Iraq's crude. The possibility of reaching an agreement on oil production cuts should not be dismissed when it comes to the prices rise.

The members of the Organization of the Petroleum Exporting Countries (OPEC) on July 1st and the non-OPEC oil producers on July 2nd will meet to decide on the future of the oil market.

Although the US has been pressuring Saudi Arabia to keep the prices low, it seems that Riyadh is more interested in continuing production cuts; a factor that can push the prices higher as the cold seasons, when the demand for oil increases, is approaching.

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