Why crude oil is going up

Stay connected and informed with Mint. Download our App Now!! It'll just take a moment. Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image. You are now subscribed to our newsletters. Premium Premium Rakesh Jhunjhunwala bullish on this multibagger stock. Premium Premium Kristal. AI launched more than 15 pre-IPO deals in a year. Brent crude , the international benchmark, advanced 1. Oil prices have surged in recent days alongside a broader rally in commodities including natural gas and coal amid an energy crunch that's sweeping Europe and Asia.

WTI is on track for its seventh straight positive week, its longest weekly winning streak since December Prices have more than doubled since the beginning of the year. Oil prices got a boost at the start of the week after OPEC and its allies opted to stick to a prior agreement to raise production by a modest , barrels per day in November despite the recent fuel shortage.

Finally, the irruption of the shale sector in the US has resulted in much of the US economy now benefiting from higher oil prices. On the whole, all these elements suggest that the impact of rising oil prices on the global economy could be less significant than traditionally expected, and they also help to explain why global GDP has remained strong in recent quarters.

Part of the reason for the agreed production cuts being exceeded is the major economic crisis which Venezuela has been suffering from and the collapse of its oil production: in May , the country supplied , barrels per day less than in May See R.

Kaplan «A Perspective on Oil», speech of 19 June. See I. Alonso and F. Skudelny , «Are the recent oil price increases set to last? Cashin et al. Sign up. About CaixaBank Research. July 12th, Download File. The factors behind the rise in oil prices In early , the oil market was in a situation in which supply persistently exceeded demand and, therefore, a significant buffer of crude oil stocks had accumulated see first chart.

Consequences for growth The impact of higher oil prices on global growth will depend on two elements: i the factors responsible for the movement supply, demand, or others and ii the balance between the positive impact on oil-exporting economies and the negative impact on importers of crude oil.