Oil prices continue their ascent, however, target levels were achieved too quickly, and soon, market sentiment can change.
The previous high for Brent mix was overcome on Monday, so from a technical point of view further upward movement special is beyond doubt. In addition, again from a technical point of view, the quotations should reach the upper boundary of the upward channel.
And so it happened, although, of course, for such a strong growth also needed the appropriate background, he was also present.
The main driver of growth was the news that Russia and Saudi Arabia agreed on the issue of freezing of oil production in the upcoming April 17 meeting in Doha oil-producing countries and non-OPEC.
“Today was contact the representatives of Saudi Arabia and Russia, during which the country reached consensus on the issue of freezing of oil production”, – said the source “Interfax”. The Saudis stressed that the final decision without reference to the position of Tehran.
If that’s the case, then the question about the freezing of production can be considered resolved, as the opinion of these two countries will have a decisive weight, and Iraq yesterday advocated a positive solution of the negotiations.
It remains only to understand how the market will behave after the meeting, but, in fact, everything is already built into the price.
Probably the end of the week the market participants will be riveted to the data on reserves and production in the United States. The first portion of the statistics already received: their report for the week was presented by the American petroleum Institute (API).
No surprises there were: after the strongest since the beginning of the year to reduce stocks of last week now they have grown up, and by 6.2 million barrels, while the forecast of 1 million
It should be noted, however, that inventories in Cushing declined slightly smoothed the negative effect.
However, after the publication of statistics quotes still went down, and now the fun part, what data will release today the U.S. Department of energy and whether the negative trend in production.
The largest players are talking about the passage of the bottom
Bloomberg published a report, which States that the leadership of the largest oil traders believed that the market has passed its bottom and by the end of the year prices will rise to $50 per barrel.
This forecast is managers of the largest companies in the industry gave during the meeting in Lausanne, Switzerland industry conferences Commodities Global Summit.
We are talking about names such as Trafigura, Vitol, Gunvor, Mercuria, Glencore and Castleton. They all said that the oil market back to balance, and demand will exceed supply in the second half of the year.
The negative Outlook from the IMF
The international monetary Fund lowered its forecast for oil prices this and next year. According to analysts, the IMF, the average price of a barrel of “black gold” in 2016 will be $34,75.
That’s almost $7 dollars less than in the previous review of the IMF.
In 2017 the average oil price of $41 per barrel. As explained in the Foundation, deterioration of the forecast is connected with considerable growth of world oil supplies. In its report the IMF also paid special attention to the consequences of a possible British exit from the EU. According to analysts of the Foundation, as it will harm the European economy, and in the whole world.
