Oil continues to decline on Monday, reacting to data about the increase in the number of oil drilling in the USA, Interfax reports. These data, according to most market participants, confirm the tendency towards the persistence of overproduction of raw materials in the market, and in the course of the session on Monday, falling prices were nearly 2%.
November futures for Brent crude on London’s ICE Futures exchange at 7:55 Moscow time has fallen in price on 1,4% — to $47,34 per barrel. Quotes of WTI oil futures for November in electronic trading on the new York Mercantile exchange (NYMEX) by this time has dropped 1.5% to $45,17 per barrel.
Oil prices for six months are approximately in the range of $40-50 per barrel, and most market participants expect that this trend will continue until the end of the year.
As it became known on Friday, the weekly statistics from Baker Hughes, the number of oil drilling in the U.S. again increased by 7 units, this trend continues for many weeks. Thus, the American manufacturers have adapted to prices in the range of $40-50. The oil reserves in the US remain near record highs.
In August, OPEC reduced the total production up to 3-month low of 200 thousand barrels to 33 million barrels, according to the WSJ, citing preliminary figures of the cartel. Production falling from record highs may indicate the decrease in intensity of the struggle for share in the world market, increasing the chances of reaching an agreement among producing countries to freeze production. OPEC Secretary General Mohammed Barkindo said the Agency APS that the cartel countries are interested in “sustained stabilization” of the market.
At the end of September in Algeria will host an informal meeting of representatives of oil-producing countries, which will discuss the issue of freezing of production. However, even if the agreement is reached, it is unlikely to lead to a radical change in the balance of supply and demand in the market.
