Oil prices edged lower Friday, giving up some of the ground made in a recent rally spurred by supply concerns in Venezuela and Iran. The economic crisis in Venezuela is curtailing the country’s oil production, while the planned reinstatement of U.S. sanctions against Iran is expected to hit production from the third-largest member of the Organization of the Petroleum Exporting Countries. Click Read More below for additional information.
What a difference a week can make.
Oil prices surged to their highest level in over three years last week, and strategists were marveling that prices had shot up so quickly. Now prices are slumping.
US crude oil futures have dropped by nearly 10% to trade around $66.50 per barrel, down from about $73 last week. Global benchmark Brent crude oil has dropped by about 6% to trade around $76, after peaking above $80.
The sharp price decline was triggered on Friday by Saudi Arabia, the biggest oil exporter in the world and de facto leader of oil cartel OPEC. Saudi energy minister Khalid Al-Falih said during a CNN-hosted panel in St. Petersburg, Russia, that he was in intensive discussions with Russia and other OPEC nations to pump more oil to ease global supply concerns.
OPEC oil producers and Russia are due to meet in Vienna on June 22 to discuss easing self-imposed supply caps, which have been in place since 2017.
“It is the intent of all producers to ensure that the oil market remains healthy, and if that means adjusting our policy in June, we are certainly prepared to do it,” Al-Falih said.
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