Oil prices rose in Asian trading on Monday due to the US government shutdown. Last week, prices fell by approximately 2% due to concerns about an oversupply of oil and declining global demand. Now that prices have fallen, some investors have done “bargain buying” and prices have risen again. A strong US dollar also affected oil prices.
This week, the focus of the oil market is on the reports of two major organizations.
- OPEC (Organization of the Petroleum Exporting Countries)
- IEA (International Energy Agency)
Investors rely on these reports to understand the state of the oil market, but both OPEC and the IEA hold differing views on future supply and demand. The OPEC report will be released on Wednesday, and the IEA report will be released on Thursday. OPEC recently increased production by 3 million barrels per day. This has raised fears of oversupply in the market. Oil prices have fallen due to sluggish global economic growth, which has led to excess supply and low demand.
