From zero to $ 35 a barrel.. Why did oil prices rise?

Oil prices jumped during the current month, supported by the return of some countries to open their economies and efforts to reduce oil production from major producers, which prevented repeated oil prices to negative levels.

According to observers, everything has changed, and things turned upside down in the oil markets in just four weeks, as last month, US oil prices fell to negative levels for the first time in history, but some emerging factors, and the decisions of major producers, brought life back again To the oil markets.

This avoided the Texas Crude June delivery contracts , which ended trading on Tuesday, the repeat scenario of the decline to below zero.

It can be said that this is the performance of oil. In April, Texas crude ended 5 percent declines after recording the first negative levels in history.

Then the performance of oil rose again and achieved price jumps by about 62 percent since the beginning of May, and the same applies to Brent crude, which also rose by about 30 percent this month.

The rise in oil prices came after some countries began easing the procedures of public closure and reopening their economy, which means the re-use of transportation and transportation, which accounts for 60 percent of the demand for oil, which is evident in China, the second largest oil consumer in the world, where Oil demand recovered to levels before the Corona epidemic, with consumption of about 13 million barrels per day.

As for the global supply of oil, the efforts of OPEC producers and independents contributed to the return of stability to the markets, after agreeing to reduce production by about ten million barrels per day during May and June.

 The pledges to deepen production cuts from major producers in OPEC, such as Saudi Arabia, the United Arab Emirates and Kuwait, starting in June, as part of the voluntary reduction efforts, also contributed to supporting prices.

Concerning the lack of storage space, falling prices, and declining demand, he pushed American producers to reduce production by about one and a half million barrels per day during the second quarter.

The same reasons that led to a decrease in production from outside OPEC, totaling 3.5 million barrels per day.

Despite the return of optimism in the oil markets, the risks still exist, such as the emergence of new waves of the outbreak of the Corona pandemic, which may reinforce the measures to close the economy again, which means the continued deterioration of economic growth, reducing the demand for oil.

The return of high oil prices may stimulate producers, especially in the United States, to increase production and return to oversupply in the markets.