Crude oil is expensive in the global market

Crude oil prices have increased slightly in the global market; however, Brent crude oil is still trending downward in the weekly trend. Increasing military activities in the Middle East, China’s policy on fuel exports and improved oil supplies from Saudi Arabia have complicated the situation in the global energy market.

During the latest trading session, the price of Brent crude oil rose 29 cents to $102.60 per barrel. This increase is equivalent to 0.28 percent. US crude oil West Texas Intermediate (WTI) also rose 27 cents, or 0.29 percent, to $93.14 a barrel.

A day earlier, the global market had seen a sharp rise. Brent rose more than $4 while WTI rose more than $2. Reports of China restricting fuel exports and reports of an increase in the US military presence in the Middle East were considered important factors behind this rise.

China’s policy is of particular importance in global energy trade. If refined petroleum product exports are restricted, the availability of diesel and other fuels in the international market may be affected. On the contrary, the improvement in oil exports from Saudi Arabia is a positive development for global supply, which can help reduce additional pressure on prices.

Weekly data also show different market trends. Brent crude is trending down by about 1.93% this week, after gaining about 14% in September. WTI also recorded a gain of about 4% last month.

These changes in global oil prices are important for a country like Pakistan, which relies on imported fuel. Continued inflation in the international market can increase pressure on import bills and local petroleum prices, while a decline in prices creates scope for some relief in this pressure. However, local pricing is also affected by other factors besides global rates, especially exchange rates and government revenues.