In the last couple of weeks the price of oil has pleased investors, moving slowly but surely upwards. Last week it managed to reach levels from November 2014, i.e. before the oil crisis even began.
The reason for the long-term bullish trend of oil prices lies in OPEC’s commitment to keep production levels low in order to allow the oversupplied market to fix itself. Recently this has also been helped by the clashes in Syria.
A very important factor for the growth of prices in the past weeks has also been the nuclear deal with Iran. A few years ago Iran signed a deal that forced it to significantly slow down its nuclear program in exchange for other countries’ lifting sanctions on Iranian exports. The deal has to be periodically signed by these other countries in order for it to continue. The approaching deadline is May 12 and the United States seem hesitant to renew the deal. If Trump fails to renew it, this would make oil supply from Iran more difficult, leading to an increase in prices once again.
Furthermore, Venezuela, which is also among the most important exporters of oil, is undergoing difficult times. The South American country’s economy is collapsing, and with that its ability to produce and export oil is hampered.
The Brent crude climbed up to $75.32, while the WTI was at $70.42.
