Crude oil prices dropped at the beginning of this week following traders' expectations of increased diesel supply under an agreement signed between Donald Trump and Vladimir Putin. However, this price drop has occurred from a higher level compared to last week, and prices remain elevated.
Details of Oil Prices
Currently, Brent oil is trading at $107.84 per barrel and West Texas Intermediate at $100.29 per barrel. These prices compare to $105.61 per barrel for Brent oil last Monday and $93.37 per barrel for WTI last week. The slight price drop occurred after Trump signed an executive order on Friday that lifted sanctions on Russian energy.
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Diesel Supply Agreement
This agreement includes the supply of approximately 2.3 million barrels of diesel this month to the United States and other countries to alleviate price pressures. Diesel prices are currently at their highest historical levels. This initial 2.3 million barrels will be followed by another 7.6 million barrels in November and in subsequent months. Analysts have pointed out that these volumes are not significant enough to have a substantial impact on the global diesel market balance, but it seems that oil traders have a different opinion.
However, this situation is only accurate to the extent that it arises from uncertainty about how this agreement will work and the duration of the sanctions exemption. This is while Iran continues to attack tankers in the Strait of Hormuz. According to the latest data, the weekly average in this waterway has dropped to 8.5 million barrels per day, while it was estimated to be 20 million barrels per day last week.
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