Oil prices touched the highest levels since 2014 and currently is trading at $73 per barrels. Over the past few months, the oil prices kept on rising and were above $70 per barrel and after a successful OPEC meeting, the prices came down to $65.
So why the price surged despite the successful meets?
After the meeting in Vienna last month with OPEC, President Trump requested to raise the production to meet the high demand and OPEC agreed to meet the demands by increasing the production by 1 million barrels per day. Russia also supported them but Iran denied this motion. The output increase is expected to increase by 7 million barrels per day but some of the members are already pumping at maximum capacity.
The output won't be enough to stabilize the oil market and OPEC is assumed to increase the production by 1.5 million barrels per day by 2019. The expectations that this increase might not be able to control the rising crude price might be the prime driver behind last week’s oil price surge.
How is America trying to handle the issue?
Recently, Trump requested King of Saudi Arabia to increase the production by 2 million barrels and he agreed to the proposition. Oil prices surged again on the news that America is pressuring his allies not to import Oil from Iran. Iran is one of the major oil producers exporting 2.9 barrels per day. This could accelerate the reduction of global crude oil inventories which might drive oil rates even higher.