Oil prices in the Asian session lose about 2%. Market participants appeared a lot of new information, but almost all of it from the point of view of negative prices.
The first thing you should pay attention to data on U.S. inventories from the American petroleum Institute (API). Here again there was an increase, although not very strong: at 3 million barrels. While gasoline stocks declined by 1.02 million barrels, and distillates – and at 2.35 million barrels.
Declined and stockpiles at the key delivery hub – Cushing: here, the decline amounted to 235 thousand barrels.
The market reaction to these statistics is difficult to assess, since approximately the same time as it has information about the end of strikes in Kuwait, and this event was key in the last two days.
As of 7:45 Moscow time the prices for oil show a fairly strong decline, losing about 2%.
Thus, the price of “black gold” after rapid growth the day before returned to those marks where it was before the meeting of oil-producing countries in Doha on Sunday. That is, despite high volatility and the abundance of news on the oil market since the beginning of week has not changed anything.
It is likely that high volatility will continue today, after all night will be released fresh data on reserves and oil production in the U.S. from the Ministry of energy of the country. Will be interesting to see what numbers we “draw” this time, because quite often the case that statistics from the Ministry of energy radically at odds with the data that the API provides, what causes price fluctuations in the market.
Be that as it may, we have already repeatedly wrote that the dynamics of oil prices has a very strong relationship with the dynamics of the dollar, and everything else is just information occasion. There is no doubt: if the American currency strengthened, no strikes in Kuwait would not support prices.
But while the dollar index against the basket of six major currencies continues to decline and is in close proximity to their recent highs.
From this we can conclude that the real reason for the fall in oil prices is not. Well, higher volatility be explained quite simple: after 2008, according to official statistics the world’s stock exchanges, the number of speculators has increased by 50%. They all closely follow the news and learn technical analysis, and therefore, big players have to come up with new tricks to maintain control over the market.
The termination of the strike in Kuwait
Mass strike of oil workers in Kuwait, which led to a serious reduction in production volumes, will be completed today. This writes Bloomberg with reference to the official news Agency of Kuwait KUNA.
The message appeared after the authorities said that they will not negotiate with the workers, until they will continue the strike. It is reported that the strikers will resume work at 7 a.m. local time.
But the main purpose which before itself put the strikers, was to show their importance to the economy of the country. Recall that the unrest began after the government announced plans to reduce wages and benefits for workers in the petroleum industry.
