Oil Prices: Weekly Analysis for UK Forex Trading
With sparking renewed fears of US oversupply, oil prices decline in the European market on Thursday after touching a two-week high earlier in today’s session; especially after the oil stock reached a new high and production of US oil shale was accelerated. However, the decline is still limited due to the suspension of Libyan supply and OPEC’s compliance with the oil production cut agreement.
At 09:30 GMT, US crude oil reached USD 49.40 per barrel from USD 49.61 recorded at the beginning of trading session. It hit its highs USD 49.73 since 16 March this year and its lows USD 49.29.
Brent oil decreased to USD 52.30 per barrel from USD 52.50 which was recorded at the beginning of the session. It hit its highs USD 52.67 since 10 March and its lows USD 52.19.
Crude oil prices “May Supply” ended yesterday at 2.4% high. Brent contracts “May Contracts” increased by 2.2% for the second consecutive day due to the suspension of Libyan supplies and possibility of extending the agreement of world production cut to the end of this year.
The US Energy Information Administration announced yesterday that the stock of crude oil increased by 0.9 million per barrel for the week ended on 24 March, which is less than the expectations which indicate the increase would be 1.2 million barrels.
According to data, total amount of stock became 565 million barrels which is the highest level since the collection of governmental data in 1982. This is a negative sign of levels of demand in the largest consumer of oil in the world.
Oil shale production increased by 10 thousand barrel for the week ended on 24 March reached its sixth consecutive week high. The total amount of production became 9.14 million barrels a day, which is the highest level of production since January 2016.
Libyan production is still lower by more than 200 thousand barrels a day as the supply was suspended in Al Sharara and Al Wafaa Oilfields due to armed conflict between Libyan groups.
According to initial data from oil markets, the level of OPEC producers’ compliance with the world production cut agreement increased to 95% in March after it was 94% in February.
Russian Minister of Energy Alexander Novak said his country was willing to reduce the production as stipulated in the world production cut agreement entered into with OPEC by the end of next month.
Novak confirmed that the level of reduced production reached 200 thousand barrel per day in March and that Russia would by the end of next April reduce to the Russian share “300 thousand barrel a day” set forth in the agreement entered into with OPEC.
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