Moscow. July 5. INTERFAX.RU – oil Prices have increased the drop on Wednesday on continuing fears of excess inventory of raw materials on the world market.
Low trading activity after the holidays amplifies price fluctuations, says Dow Jones.
September futures for Brent crude on London’s ICE Futures exchange to 17:55 Moscow time has decreased on the $1.45 (2,92%) to $of 48.16 per barrel. During the session the price of Brent crude fell below $48 per barrel.
August futures for oil WTI on the new York Mercantile exchange (NYMEX) dropped by this time of $1.62 (3,44%) to $by 45.45 per barrel.
“Trading volumes are quite low, says Energy Aspects analyst Richard Mallinson. – Major changes of fundamental factors occurred. We observed a rise in oil prices for eight sessions in a row, and now this period has come to an end, and the mood of the market is still bearish.
The market is waiting for data from the American petroleum Institute (API) on the energy reserves in the U.S. last week, which will appear later on Wednesday. The publication of official data on stockpiles in the United States postponed to July 6 due to the has come this week of the holiday.
As reported, in June, OPEC increased oil production by 260 thousand barrels per day (b/d) compared with may. About half of the increase is due to growth of oil production in Libya and Nigeria, are exempt from participation in the agreement on the limitation of production.
This situation causes investors concern that measures OPEC+ will not be sufficient for reducing the world’s fuel reserves.
An additional negative factor in the environment was the strengthening of the U.S. dollar relative to the Euro ahead of the release of minutes from the June meeting of the Federal reserve system. A strong dollar reduces the appeal of commodities as objects for investment.
Meanwhile, the analyst of Bank UBS Giovanni Taunovo believes that Brent and WTI by year-end, increases of 23% and 20% respectively, to $58 and $60 per barrel. In his view, supply growth in the third quarter will begin to lag behind the increase in demand, stocks will increasingly be emptied, and the quotes will increase.
Experts from Raymond James Bank is even more optimistic – according to their forecast, the oil price will rise to $65 per barrel, while the recent fall in fuel costs caused by the overly negative tone of news, which distracts investor attention from the overall favorable picture of the market.
Citigroup also forecast the rise of oil prices. Experts believe that the recent rise in oil prices can be an indicator of a new rally in the market, which will be sustained due to reduction of stocks of raw materials in the second half.