Large producers have spare capacity that reduces the risk of deficiency
Source: Arabic.net
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Oil prices returned to decline during the day after it jumped again above the level of seventy dollars a barrel, amid fears of exacerbating tensions in the region.
With that, the gains of US light crude rose since the beginning of the year to 2.5%, while Brent’s gains were close to 1%.
Despite tensions over the safety of shipments through the Strait of Hormuz, OPEC possesses large amounts of surplus energy after reducing supplies during the past three years.
The United States also has additional energy after it became an oil exporter for the second month in a row.
In addition, large oil consumers, including the United States and China, hold millions of barrels of strategic reserves that can be used to make up for any shortfall.
Abdul Aziz Al-Muqbel, an economist and writer specializing in the oil industry, said in connection with Al-Arabiya that the movement of oil prices since last December’s meeting was upward.
He added that the Soleimani incident affected the oil fluctuations, did not affect the upward pattern of prices, and therefore the fluctuations overshadowed, but the prices in the oil markets continued their upward trend, and it was not a sudden rise.
He pointed to many factors that contributed to calm oil prices, the most prominent of which is the continuation of production and talk of political calm, as the oil market has begun to understand Iran’s behavior desiring to create fluctuations.
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