Having risen steadily – and somewhat alarmingly – for
more than a week, Brent crude price has slightly gone down for most of the day on
Tuesday.
Major oil producers in the OPEC, meanwhile, still
think the price of the crude oil is in the right range as far as their economic
issues are concerned, thanks to the output cut.
The minnows in the organization, however, do not see
it that way and reluctantly agree with cuts; they want to sell as much oil as
possible and earn revenues as a matter of urgency, but their room for manoeuvre
is severely restricted by the organizational obligations; Nigeria is a case in
point.
Against this backdrop, analysts are keen on following
the next month’s meeting of the OPEC+, as the outcome of these monthly meetings
happen to be the single most significant factor in determining the crude oil
price.
The relative success of vaccine programmes,
meanwhile, is bringing the traffic back on our streets despite lockdowns – and the
outbreaks of new variants. The major crude importers of Asia, India and China,
are back in the game and demand is slowly approaching the pre-pandemic level,
despite the price being raised by the oil producers in the Middle East for the
region.
Oil price has shown the remarkable recovery since
the peak of the pandemic, when a major sector is still in the doldrums, having
been completely decimated by the pandemic – the airline industry.
The image shows the situation at Heathrow airport in
the United Kingdom at 3pm on Tuesday; there was not a single plane in the air;
just two planes could be seeing taxing.
Heathrow airport used to be the world’s busiest
airport up until a few years ago with a plane in the air at every 2-mintue
interval; the sad picture sums up the current predicament of an industry that
helps millions of people make a living, across the world.
Of course, it’s just a matter of time before the
planes will be back in the air; when it happens, the demand for jet fuel will
jump up exponentially and the oil price will react in proportion.
Analysts are concerned about the ceiling of the
crude oil price when the air-travel factor starts playing its role in the oil
equation; if the current trend is anything to go by, it is only going to be
more dramatic, defying the stuff in the text books.
