Analysis of Oil Prices

1. CRUDE OIL PRICES
The monthly average spot price of Brent crude oil decreased by $3/b in June to
$74/b. Despite the decline, June marked the third consecutive month in which Brent
crude oil spot prices averaged more than $70/b. The price decline in June largely
reflected market expectations in the early part of the month that OPEC, along with
certain non-OPEC producers including Russia.
Oil came to a boil in the past two to three months on account of the following
reasons:
 the US attack on Syria
 the US President’s pull-out from the Iran nuclear agreement
 Venezuela’s inability to rein in its falling oil production
 sharper than expected fall in global oil inventory
 sharp speculation with investors betting in record numbers on higher oil prices
Oil demand and supply may be inelastic in the short-term, but in the long-term, they
are remarkably elastic. the supply and demand curves aren't straight lines, nor are
they convex. They are probably closer to squiggles. This is because human behavior
in the short-run isn't necessarily predictable.

2. In India
Crude Oil Crude oil production during June, 2018 was 2884.39 TMT which is
3.17% lower than target and 3.39% lower when compared with June, 2017.
Cumulative crude oil production during April-June, 2018 was 8807.25 TMT which
is 1.46% lower than target for the period and 2.40% lower than production during
corresponding period of last year.
How Oil Prices Could Rise in Near Future
Oil prices reached the record high of $145/b in 2008 and were $100/b in 2014.
That's when the Organization for Economic Cooperation and Development forecast
that the price of Brent oil could go as high as $270/b by 2020. It based its prediction
on skyrocketing demand from China and other emerging markets. Prices this high
seem unlikely now that shale oil has become available.
The idea of oil at $200/b seems catastrophic to the American way of life. But
people in the European Union were paying the equivalent of about $250/b for years
due to high taxes. That didn't stop the EU from being the world's third-largest oil
consumer. As long as people have time to adjust, they will find ways to live with
higher oil prices.
Reference
Monthly Production Report June, 2018 Posted On: 25 JUL 2018 2:18PM by PIB Delhi
http://www.theoildrum.com/node/2899