By Adedapo Adesanya
The price of the Organisation of the Petroleum Exporting Countries (OPEC) basket of 13 crudes rose to $43.40 per barrel on Tuesday, July 28.
Compared with $43.14 per barrel of the previous day, the latest OPEC Secretariat calculations disclosed that the average crude prices gained 26 cents or 0.60 per cent.
The OPEC Reference Basket of Crudes is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Djeno (Congo), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
The gain came after US Republicans unveiled a new coronavirus relief proposal hammered out with the White House, four days before millions of Americans lose expanded unemployment benefits.
However, the gains were capped by opposition from both Democrats and from some Republicans in addition to surging coronavirus cases in the world.
In other OPEC related news, some OPEC officials have noted that oil demand could be permanently damaged from the pandemic and some are even admitting that demand may have peaked.
“The demand does not return to pre-crisis levels or it takes time for this to happen,” an OPEC source cited by Reuters said, adding “The main concern is that oil demand will peak in the next few years due to rapid technological advances, especially in car batteries.”
They said this year’s crisis that sent oil below $16 per barrel had prompted OPEC and its 13 members to question long-held views on the demand growth outlook.
They noted that the cartel faces a dramatic adjustment if consumption starts a permanent decline.
It was noted that the group will need to manage even more closely its cooperation with other producers, such as Russia, to maximise falling revenues and will have to work to ensure relations so participants don’t cause more trouble in the fight for market share.
They added that OPEC’s job will be harder in the future because of lower demand and rising non-OPEC production.
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