Oil price posts two-year highs - but how long can it last?
Brent rose above $59 a barrel this week, its best third-quarter showing since 2004

A free daily digest of the biggest news stories of the day - and the best features from our website
Thank you for signing up to TheWeek. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.
Oil price: five reasons why oil has re-entered a bear market
08 July
Oil re-entered a bear market yesterday as the price for Brent Crude, the international benchmark, recorded its largest one-day loss since February.
On Monday, the oil price fell by six per cent and it has continued to dwindle, reaching $55.40 a barrel at around 8am BST today. The price of Brent has now fallen by more than a fifth since it hit a year-high of $69.63 a barrel in May. Bear markets are commonly defined as occurring when prices fall 20 per cent from their peak.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
So what is causing the slide?
The Financial Times identifies five key factors behind the falling oil price. The first is the Iran nuclear deal, which is expected to be completed by the end of the week. If it goes through, it is likely that sanctions limiting Tehran's ability to trade oil will be lifted, which could add up to 800,000 barrels a day to the market within a year.
The second factor is China's economic slowdown, which will affect demand. "When China's economy wobbles, the oil market is quick to respond", the FT says. Carsten Menke, a commodities analyst at Julius Baer echoes the FT's analysis, noting that "commodity markets are signalling broad-based concerns about Chinese demand and the government's ability to stimulate growth".
Another factor causing oil to re-enter a bear market is the ongoing turmoil in Greece. The country's No vote in last Sunday's referendum on whether to accept the latest bailout package has catapulted the country into a new period of uncertainty. While the country's difficulties are unlikely to have a direct impact on demand for oil, they have led to a gradual strengthening of the US dollar. As the FT notes, "commodities like oil that are priced in dollars tend to move inversely to the US currency".
Fourth is the unexpected resilience of the US shale gas market which has proved itself to be more immune to lower oil prices than many analysts expected. Shale gas production in conjunction with oil coming from traditional sources has contributed to a global glut that has pushed energy prices down.
Finally, Opec's refusal to curb its own output has contributed to oil inventory levels in Western Europe hitting their highest levels in two years.
So can we expect to see the oil price rebound? Possibly, say analysts at consultancy Facts Global Energy, but not any time soon: "Low prices will eventually cure low prices. But we must not get too excited too quickly," they said in a note.
Continue reading for free
We hope you're enjoying The Week's refreshingly open-minded journalism.
Subscribed to The Week? Register your account with the same email as your subscription.
Sign up to our 10 Things You Need to Know Today newsletter
A free daily digest of the biggest news stories of the day - and the best features from our website
-
10 things you need to know today: October 3, 2023
Daily Briefing Trump calls fraud case a 'sham' as trial starts, Matt Gaetz files resolution seeking to oust McCarthy, and more
By Harold Maass Published
-
The Tory tribes vying for influence at this year's party conference
The Explainer From free-market ultras to culture warriors, the party's electoral coalition is starting to fracture
By The Week Staff Published
-
5 destinations to visit this fall
The Week Recommends Have a frightfully good time in Sleepy Hollow or enjoy the foliage in Asheville
By Catherine Garcia Published
-
Has Saudi Arabia lost control of oil prices?
Today's Big Question Kingdom goes it alone to cut production, risking tension with US and reigniting cooling inflation in Europe
By The Week Staff Published
-
Opec+: what oil production cut means for the West
feature Dramatic drop in output helps Russia but could spell further price rises for consumers
By Fred Kelly Published
-
US angered by Opec+ oil cut
Speed Read Energy prices to rise further as producers slash supply by two million barrels a day
By Fred Kelly Published
-
The countries that could follow Sri Lanka into economic chaos
Why Everyone’s Talking About Food and fuel shortages that rocked Asian nation are spreading around the globe
By The Week Staff Published
-
Global oil demand forecast lowered for 2020 and 2021
Speed Read IEA report says jet fuel demand remains the major source of weakness
By Mike Starling Published
-
Are US-Iran tensions flaring again?
In Depth Trump threatens military action over Twitter
By The Week Staff Last updated
-
Can a deal be struck to raise oil prices?
In Depth Opec+ will convene today over video link in a bid to boost crude
By William Gritten Last updated
-
What do negative oil prices mean?
In Depth Perfect storm of oversupply and storage shortages sees producers paying to get rid of US crude
By Gabriel Power Last updated