Seasonal Winter Demand Rises... Strong Prices Expected for a While
Dubai Oil and Brent Oil Around $80
[Asia Economy Reporter Jang Sehee] The Bank of Korea forecasted that international oil prices will maintain their strength for the time being due to the persistent structural imbalance in oil supply and demand.
In its 'International Commodity Market Trends' report published on the 28th in Overseas Economic Focus, the Bank of Korea stated, "Major institutions expect that while future international oil prices will be influenced by the global COVID-19 developments, the ongoing structural imbalance in oil supply and demand will keep prices strong for the time being."
The Bank of Korea further explained, "International oil prices have sharply risen as seasonal winter demand and increased alternative energy demand have expanded, while supply has not kept pace."
From the 1st to the 24th of this month, Dubai crude oil recorded $80.8 per barrel, rising to around the $80 level. Brent crude also recorded $82.5 during the same period, higher than the September average of $74.5.
It particularly analyzed that the recent surge in prices of other energies such as natural gas has led to an expansion in oil substitution demand.
Additionally, the oil-producing countries' coalition OPEC Plus (OPEC+) has been maintaining the previously scheduled production increase of 400,000 barrels per day, rejecting continuous additional production increase demands from major countries including the United States.
The Bank of Korea anticipated, "Since mid-November, the possibility of strategic oil reserve releases by the United States, China, and others has increased, and prices are expected to slightly decline due to the resurgence of COVID-19 in Europe."
Meanwhile, regarding other commodity prices, natural gas and coal prices have fallen, whereas the S&P Grain Index rose by 6.2% month-on-month, influenced by rising fertilizer prices.
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