As Lockdowns Rise, Will Oil Prices Fall To March Lows?
Yong-Liang Por, Consultant, Institute for Energy Economics & Financial Analysis (IEEFA)
Last week, oil prices hit their lowest point since May, with Brent crude dipping below $37 per barrel. After some initial promising signs of recovery due to economies reopening and production cuts, Brent had been trading steadily between $40 to $45 a barrel for much of the summer, but now we’re seeing fresh restrictions placed on parts of Europe such as the UK and France.
Here in Malaysia, Budget 2021 is also being announced later this week, and oil prices are a key thing to watch since the Budget will be made based on an oil price assumption.
Last year, the budget was based on the assumption of oil prices averaging US$62 per barrel, but that will likely be much lower this year.
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