The price of oil has been consistently nudging down on the back of diplomatic uncertainty over Saudi Arabia’s involvement in an embassy killing in Turkey and supported by pipeline constraints in the USA’s shale gas industry.
Earlier this morning the price of Western Texas Intermediate (WTI) traded at $66.59 per barrel whilst global standard Brent crude was selling for $76.39 a barrel.
As recently as the beginning of the month, Brent was steeply spiking north of $85 a barrel as fears mounted that international supply was heading for supply constraints, mainly because of incoming US sanctions against Iran and the inability of OPEC countries to produce surplus supply.
However, Saudi energy minister Khalid Al-Falih has given his assurance that the kingdom and its OPEC allies are well positioned to avert any supply shortfall that could possibly stem from slowed drilling in Iran.
Increased drilling in the US has also helped to ease fears that supply strain could push the oil price to triple figures by Christmas.
According to the American Petroleum Institute a 9.88 million barrel rise was recorded in recent inventories, adding a drastic turnaround in the oil price that many feared was uncontrollably spiking.
As Libya prepares to step up production and shale gas operations in the US experience infrastructural constraint issues, recent fears over drastic spikes in the oil price now suddenly seem to be unfounded.
