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Oil traded in a narrow range

15.08.2017

On Monday (August 14), the oil market continued to trade in a narrow price range of 51.20 - 52.90 dollars per barrel. Contradictory data, which constantly enter the market, do not allow bidders to choose a scenario for further development of events.

Euphoria from the decline in crude oil reserves after the publication of the EIA report (last week stocks fell by 6.45 million barrels) quickly passed after the publication of statistics by OPEC countries. According to the organization of oil-exporting countries, contrary to all agreements, many countries of the cartel have increased the production and export of energy resources. Approximate volumes amount to an additional 370 thousand barrels per day, and all talks about the seasonal increase in demand by bidders are simply ignored.

Moreover, the market reaction is becoming more acute. Investors are tired of listening to endless promises of lower production volumes, against the backdrop of the ever-growing volume of raw materials. An additional negative for the oil market is the steady growth of oil drilling platforms in the United States. According to the oil service company Baker Hughes, only for the past week the number of platforms has grown by 3 units and reached the mark of 768.

Another reason for the opening of short positions in the oil market is the reduction in demand estimates in developing countries. According to the IEA forecasts by the end of 2017, the demand for oil will be only 33 million barrels per day, which is slightly higher than the current production volumes of this type of raw materials by OPEC countries.

Thus, there are no great prospects for increasing oil prices in the medium term. The inability of OPEC to control the production of "black gold", most likely, will not allow the market to get rid of the excess supply until the end of 2017. Therefore, after leaving the narrow trade corridor 51.20 - 52.90 dollars per barrel, prices with a high probability will rush down. The first serious barrier on the way of oil quotes will be the psychological level of support at around $ 50 per barrel.