International Energy Agency rules out spike in oil prices

Paris: – Since the last few days, US financial institutes are predicting and forecasting a flareup in the international oil prices. The International Energy Agency (IEA) claimed that these statements regarding oil price flareup are misleading. In the last five months, oil prices have increased by 80%. Moreover, the US financial institutions and analysts had predicted that these could shoot up to $100 per barrel in the near future.   

fuel-ratesLast year, in the beginning, the global economy had slowed down considerably due to the Coronavirus pandemic that originated in China. Major industries and daily activities came to a grinding halt, given the lockdowns imposed in most countries. The oil sector was very badly hit because of this. In March 2020, the rates for crude oil had dipped to $23 per barrel. International analysts had warned that these rated could dip further to $10 per barrel.  But a few months ago, many countries eased the lockdown and decided to provide an impetus to the industry and the daily activities. This resulted in a steady rise in oil rates. Saudi Arabia and certain OPEC members had proposed a production cut to control the fall in the rates. Although the proposal for a production cut was not approved, OPEC and other partner countries indicated that the cut implemented last year will be continued.   

As the production cut continued even when the demand for crude oil increased, the rates started rising steadily. The rate for crude oil as of today is $63 per barrel, and there is the possibility that it will rise to $75 per barrel in a week. Against the background of these rising rates, the US financial institutions published reports making predictions regarding the oil rates. The reports claimed that the oil rates would shoot to more than $100 per barrel by the turn of the year.   

IEA has objected to these reports and has said that the information and forecasts in them are misguiding. It is being said that the demand will increase given the economic aids announced by many countries, and the spate of oil price rise will start owing to high demand. But IEA has warned that various countries have huge reserve oil stocks, and there is no possibility of shortage against the demand. 

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