for the First time since the beginning of April the quotations of the barrel started the week with growth, not with the fall, approaching the level of 35 USD per barrel of Brent. Fundamentally on the market yet nothing has changed, except perhaps that the growth of demand for oil in China. The volume of oil refining in China last month % to 53.85 million tonnes, almost 11% more than in March, and 0.8% higher than last year over the same period. The problem is that these statistics can be explained not by increased consumption, and successful current to the refineries of the China situation, which they have used, their maximum loading capacity with cheap oil.
Also seriously supported the prices are weekly statistics on oil reserves in the United States, which for the first time showed a decrease of 745 thousand barrels. But more was the effect of the news itself, rather than a real decrease. In total, over the last 4 weeks, crude oil inventories in the U.S. rose by 27.9 million barrels. These figures are a few hundred thousand barrels of lower to last week just lost.
a Slightly different pattern is observed with the number of working drilling rigs in the U.S. decreased to 258 units, compared to 2009. These figures speak about decrease in the production of shale oil. The catch is that the shale industry is very mobile and react quickly to any changes in the external environment. Stopped drilling have not gone away, even if he switched sides, and can resume work at any time.
the Glut of oil in may, the market is projected to 20-25 million barrels per day. Under the terms of the new deal OPEC+ participants prior to the beginning of July will reduce production at 9.7 million barrels per day, plus 1.18 million barrels per day of additional reductions in Saudi Arabia, the UAE and Kuwait. About 3-5 million barrels per day decline in production occurs in countries not officially joined OPEC+, but support the production cuts. The total decline in production even in the best scenario, will leave the market in excess of 5 million barrels per day.
According to senior analyst UK “the alpha-the Capital” Maxim Biryukov, hope for a speedy recovery in oil demand are pushing prices up, but it is still uncertainty regarding the expected dynamics of recovery of the world economy. Despite the easing of the lockdown economic activity may remain at relatively low levels due to lack of consumer demand. The expert stressed that given the record of the largest reserves of oil and the amount of drifting oil tankers we can not exclude a new round of price reductions.
From the point of view of an analyst of commodity markets “Opening Broker” Oksana Lukicheva, the danger of falling prices is retained if suddenly ��the process of economic recovery will unfold back or something goes wrong.
do Not forget also about the geopolitical risks. As accumulation of fatigue by the pandemic and hopes to return to a normal life, resumed the half-forgotten of friction with China and Iran. The development of these conflicts could push the quotations of the barrel to rise and fall. The US President Donald trump has called customs duties are an important tool in negotiations with Beijing and made their increase for Chinese goods. Last year, trade war United States and China was the main limiting factor for the growth of oil prices.