Despite the fall in the first trading session of the week, oil prices remained higher than in previous months. According to Reuters, the stronger dollar has put pressure on demand for oil, making it more expensive for buyers holding other currencies. The International Energy Agency (IEA) said in its monthly report on August 11 that supply cuts by Saudi Arabia and Russia, the Organization of the Petroleum Exporting Countries and allies (OPEC+), are expected to reduce global oil inventories by about 2.2 million barrels. hopefully. per day for the remainder of the year. This move contributed to raising oil prices.
However, the IEA also forecasts a sharp drop in oil demand in 2024 due to economic difficulties. “The global economic outlook remains challenging in the face of higher interest rates and tighter bank credit, putting additional pressure on businesses already suffering from sluggish production and trade,” the IEA said. Slow economic recovery in China and a stronger dollar could weigh oil prices lower, but OPEC+ has signaled it will strengthen resources, supply and market stability, said Tina Teng, an analyst at CMC Markets Financial Services (UK). .
Oil refinery in Rodeo Field, California – USA Photo: Reuters
Meanwhile, the Russian ruble has fallen to 100,9950 rubles against the dollar, its lowest level in nearly 17 months and has lost nearly 30% of its value against the greenback since the start of the year. Maxim Oreshkin, an economic adviser to President Vladimir Putin, said monetary easing was the main reason for the weakening of the ruble and rising inflation. According to him, the Central Bank of Russia has all the tools necessary in the near future to normalize the ruble price and ensure that lending rates fall to sustainable levels.
The economic adviser said that a weak ruble would complicate the process of economic restructuring and have a negative impact on people’s real incomes. Russia’s central bank also last week halted foreign currency purchases for the rest of 2023 to support the local currency. However, the move has raised concerns about rising inflation as Russia faces isolation and sanctions from the West.