Crude oil price: the Taliban factor in the crude oil markets

 

Taliban and the oil price

Crude oil markets made a significant recovery on Monday, having been through disturbing price fluctuations in the last few days. As of 18:00 GMT, the price of WTI and Brent stood at $65.52 and $68.60 with a rise of 5.44% and 5.25% respectively.

Since there was no change in the factors that usually affect the crude oil price at the weekend, the fall of price may be due to the negative sentiments that stemmed from the rapid fall of Afghanistan government, coupled with the US abrupt withdraw – and of course, the chaos ensued.

Since Taliban stuck to its words so far, the tension in Kabul is in decline and normalcy returns to the capital. The anxieties of people, however, remain the same.

The recovery of the crude oil markets, in this context, appears to be linked to the relative calm in Afghanistan and the possibility of yet another foreign intervention being low.

Neither the Taliban nor its neighbours is out of the woods yet, though. The former has been adamant that the foreign troops must leave by the end of August, honouring their pledge.

If the optimism seen in the crude oil markets is not eclipsed by the US weekly inventory data due in two days, the recovery of the price will make progress at a slower rate.

The markets are watching the next move by the OPEC+ too. Although the organization does not see a need for increase the output, it has not rejected the US request emphatically either; if the price keeps rising steeply, then the OPEC+ will be compelled to address the US concerns.

 

 

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