LOC11:28
08:28 GMT
Chairman of Kuwait Business Council in Dubai Dr. Firas Al-Salem
By Khaled Al-Mutairi
KUWAIT, May 13 (KUNA) -- Kuwaiti oil experts have welcomed the 90-days suspension of tariffs between the US and China, saying that the move has bolstered confidence in the global economy and could lead to increased demand for oil.
Experts told KUNA that oil prices had dropped significantly since the onset of the tariff dispute in April, driven by fears of a global economic slowdown, however, the recent agreement has triggered price increases and eased market concerns.
Expert Jamal Al-Gharabally described the suspension as a positive step towards resolving trade tensions that have pressured oil markets, and noted that OPEC estimates potential one to two percent annual increase in oil demand if trade relations stabilize.
Dr. Abdulsamee Behbehani, another energy expert, said that although OPEC decided to increase oil production in May and June -which could have caused oil prices to drop- the positive impact of the US-China tariff agreement was stronger.
He added that the agreement led to market optimism that led to oil prices to rise, pushing oil to USD 66 per barrel (pb), the highest prince in two weeks, and that Iran's agreement to continue indirect negotiations with the US will have a near-term impact on oil prices.
Analyst Ahmad Mulla Juma stressed that oil prices largely reflect trader sentiment, positive economic forecast raise demand expectation, while pessimism has the opposite effect.
Chairman of Kuwait Business Council in Dubai, Dr. Firas Al-Salem warned that despite the temporary tariff suspension; the uncertainty continues in global economic policies, and added that he expects oil prices to range between USD 60-70 pb, citing weak demand visibility and ongoing pressure on petrochemical margins.
The US and China agreed to suspend the tariffs imposed since April 2 and formed a joint consultation committee, the deal reduces tariffs on Chinese goods from 145 percent to 30 percent, with most of the remaining duties delayed for 90 days. (end)
km.dss