Crude oil keeps on appreciating. Brent oil has come close to $72/b. Apparently, all of the major oil exporters, including Russia, whose national budget has been heavily dependent on the export of crude oil for many decades, are now happy with the current oil price rally. The thing is that the prices have already gone rally high relative to major lows set in late 2018 and early 2019. At this point, they have already come close to last year's highs.
Donald Trump is upset while Russia is happy with the current situation in the international market of crude oil. Even though the Kremlin can put up even with 50-55 dollars per barrel, 70 dollars per barrel and even higher is clearly way better than that. The thing is that Russia can even make profits at 40 dollar per barrel. Actually, that's the conventional price built into the Russian budget right now. Any profits above that price are called extra profits. They go to a dedicate reserve fund to feed the economy at difficult times without having to borrow money from the outside.
On the last trading day of the past week, Brent oil exceeded another major level at 72 dollars per barrel and moved on to reach 72 dollars per barrel. This is comparable to the average highs of 2018, when the price moved inside the 70-80 range. Last year's low and high are $49,93/b and $86,84/b respectively.
The chart indicates that crude oil isn't rallying as fast as it was plunging at the ned of 2018. However, this is a benefit for the market since they have got a chance to adapt to new conditions.
The current rally is said to be fueled by the likelihood of lower oil production coupled with tougher U.S. sanctions against Iran, and tensions in Venezuela , as well as the armed conflict in Libya and a range of other events.
2 months ago, Brent oil used to be traded around 64 dollars per barrel. So, that's a pretty decent price gain we can see in the global market of crude oil right now.
Previously, Donald Trump heavily criticized Middle Eastern oil nations for being reluctant to back lower oil prices. When oil prices dropped all the way down to 50 dollars per barrels, President Trump asked the Saudis to keep on working in the same direction, but they decided to play in the opposite one.
