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Oil prices skyrocket after the explosion in Beirut port

The cost of the September futures contract for Brent crude on the London ICE stock exchange rose from 3.3% to $45.9 per barrel, according to trading data. This is the highest figure since early March when it became known about the collapse of the OPEC + deal to cut production. The growth is also shown by the Texas brand WTI. The futures contract for September delivery rose almost 2% to $43.14 a barrel.

Oil market analysts attribute this growth not only to the recovery in demand for raw materials amid the gradual easing of quarantine measures in a number of countries and a sharp decrease in oil reserves in the United States but also to the explosion in the port of Beirut. As the president of the financial company NationsShares Scott Nations explained, the incident in Lebanon was one of the main reasons for the soaring of quotations for “black gold” on August 5. The expert did not rule out that the incident could lead to interruptions in the supply of energy resources.

According to Again Capital partner John Kilduff, the explosion in the port of Beirut looks like an accident, but the incident raises concerns about growing tensions in the Middle East, which traditionally forces oil prices to go up.

OPEC + participants did not renew the deal at the beginning of March because they could not agree on the volume of production restrictions. As a result, there was a collapse in oil prices, and the dollar rate rose to 80 rubles. The situation has been exacerbated by a decrease in global demand for raw materials due to the coronavirus pandemic. The parties were able to reach an agreement at the second emergency meeting convened on the evening of April 12. During the meeting, representatives of the OPEC + countries agreed on a decrease in production by 9.7 million barrels per day for May-June. Kuwait's oil minister Khaled al-Fadel called the treaty a “historic deal.” Since July, the parties planned to switch to a gradual increase in oil production.

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