The decline in oil prices to $46 per barrel short — term phenomenon, and in the near future we should expect their recovery to the $50 per barrel. This opinion is shared by analysts of the French Bank Societe Generale.
“Despite the decline in stocks of oil in the U.S. — ed.) by 2.2 million barrels and, more importantly, the reduction of production by 194 thousand barrels — up to 8.4 million barrels per day, the price of September contract Brent has fallen by 5% — up to $46.4 per barrel. Probably, the negative market reaction associated with published the day before the API data, which pointed to the decrease in reserves by 6 million barrels,” — quoted by RNS the review of the Societe Generale on the currency market.
A drop to $46 experts considered excessive, and the optimal call price at $50 per barrel.
As recalled by the Deputy Director of analytical Department of “Alpari” Anna Kokoreva, “on Thursday, a barrel of Brent crude has updated a two-month minimum for the next wave of doubts about recovery in energy demand in the near future.”
“After repealed short-term factors — the strike of Norwegian oil workers, disruption of Nigerian put others became evident that the market is somewhat overestimated U.S. fuel demand in the holiday season and vacations. At the same time, the extraction of “black gold” continues to increase gradually. This creates a solid Foundation for the formation of a new wave of the “bearish” trend,” says the review expert.
Today, she says, “oil prices recovered after falling the day before”. In addition, it indicates Kokoreva, “the IMF believes that oil prices could rise to $75 a barrel, but on the condition that OPEC will reduce its production and export. “According to the Fund, if the cartel will reduce its market share from 42% to 35%, then prices will go up. We are talking about reduction of supplies in the amount of 7 million barrels per day. At the moment OPEC countries produce about 32 million barrels per day. Thus, the IMF is said to reduce the production by 20%. This is a large amount, and the cartel will not do it under any circumstances, and will not agree to reduce the share of 7%”, — said the analyst.
