US President Joe Biden visited Saudi Arabia to persuade Saudi Arabians to increase crude oil production and relieve inflation strain. However, his trip was unsuccessful, it failed to deliver anything concrete, and he left the middle east without increased supply. The Saudis and other key officials responded to his demand by declining his offer and restating that production scheduling and volume of production detailing power lies with the OPEC.
It is possible that OPEC’S impending meeting on August 3, 2022, could see an alteration in the production outlook but considering OPEC’s current strain to meet quotas; it is difficult to see the achievability of a surge in production. The existing tight crude oil conditions might continue to be a succor for the hike in crude prices.
Thursday, 21st July 2022, will see the expected reuse of the Nord Stream 1 pipeline under the spotlight. Russia’s political situation due to the ongoing war may cause the Nord Stream pipeline to remain closed even on Thursday. If Russia fails to bring the pipeline back online as expected, experts believe we will see energy prices take off as markets concerns around and the energy crisis grows.
This political uncertainty and the failure of Biden’s trip is a positive for Brent crude oil’s prices at the moment. Still, the demand-side fears from an undefined Chinese economy, global recession threats, and a strong US Dollar keep crude oil under control.