Consumers have undoubtedly noticed some higher prices when refueling their cars, and according to Matt Badiali, it’s gonna get a bit worse. Iran has throttled their oil production after sanctions by President Donald Trump, and experts have pointed out noticeable declines in Iran’s gas exports. Badiali says previously, fears of export failures in Iran on several occasions had a heavy impact on oil prices. Visit the website mattbadialiguru.com to learn more.
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On June 22nd in Vienna, the member states of Opec, together with other important producing countries such as Russia, will be discussing their production volumes. Opec countries like Iraq, Iran and Venezuela are in favor of maintaining the restrictions, which as Badiali says, will drive up the cost of crude oil. However, Saudi Arabia and Russia would like to increase production.
As a natural resources and geologist expert, Matt Badiali, also an editor at Banyan Hill Publishing, monitors and evaluates the markets closely. Badiali says he anticipates crude oil to climb to $100 per barrel. As of June, The North Sea oil BRENT was trading at $75 per barrel and with sanctions against Iran causing them to slow production, Badiali may see that $100 per barrel or very close to that number very soon.
China Competes Against Dollar
China entered the so-called futures trading on the crude oil market, using their own Chinese national currency, the Yuan.
To date, oil trading has been dominated by two futures contracts, which is in the North Sea oil called Brent Futures, and the United States oil called WTI Futures, and both contracts have been settled in dollars, instead of foreign currency. But China has decided to trade in their own currency. The biggest benefit of futures contracts is purchasing oil at a fixed price on delivery at a certain future date, and this decreases price fluctuations. But, Matt Badiali points out that critics are saying China’s trading in yuan could lead to irrational price fluctuations.
China also wants to increase the importance of their local currency yuan, but the US currency has always held dominance when it comes to crude oil trading. Matt Badiali points out that this hasn’t changed, however, China overtook the US as the world’s largest foreign oil importer.
What Will OPEC Decide?
The extent to which OPEC will increase crude oil production this summer, and how this will affect oil prices remains open. With Iran dealing with US sanctions, and Venezuela with a severe economic crisis the cost for barrel could go either way. Read more at PRNewswire about Matt Badiali.