The divergence between Brent and NYMEX is due to the surge in US production and the kind of legislative constraints which are keeping a lot of that production within the US, said Thomas Pugh, commodities economist, Capital Economics.

On the crude prices, Pugh said, “The big thing is the OPEC meeting on June 22. However, until then, I think prices could probably drift down a little bit more. We have seen a very sharp correction and I think there isn’t going to be much driving prices back up to the kind of $80 per barrel Brent level.

The only thing could be if we get some good signs that Iranian exports are being constrained; that could send us back up. But I expect a slow drifting down.”

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First Published:May 29, 2018 5:07 PM IST