The cost of crude oil this morning moved to a negative trend. The main reason for the decline lies in the extreme concern of investors regarding the introduction of new restrictive quarantine measures related to coronavirus infection. New cases of infection are noted not only in the United States and Latin America but also throughout the interval from Japan and Australia to Iran.
Moreover, in America itself, the number of patients is growing rapidly. At present, their total number of cases has exceeded to 3 million. In order to stop the spread of infection, the authorities of some American states had to resort again to restrictive measures, which earlier had already begun to be systematically lifted. This situation looks extremely tense for market participants who are already tuned in to a quick strengthening of the oil market.
Analysts warn that the growth rate of demand for black gold will greatly decline in the near future also due to the re-implementation of quarantine measures. It should be noted that the first wave of the pandemic already sent demand to the negative zone.
The enthusiasm of market participants, which was noted against the backdrop of the lifting of quarantine and the removal of restrictive measures, almost completely disappeared along with a partial return to them.
According to analysts, gasoline consumption in the United States of America during the weekend holiday not only did not increase but also decreased quite significantly by 22%.
According to preliminary forecasts by experts, the next report on stocks of raw materials in America should reflect an increase in the total volume of gasoline by about 1 million barrels. At the same time, crude oil inventories should be reduced by 3 million barrels. And distillates, in turn, will grow by 500,000 barrels.
The price of Brent crude oil futures for delivery in September at a trading floor in London this morning fell by 0.65% or $ 0.28. Its current level was at around 42.82 dollars per barrel. Recall that yesterday's trading session ended with a slight increase of 0.7% or 0.3 dollars.
The price of WTI light crude oil futures for August delivery on an electronic trading floor in New York fell by 0.71% or $ 0.29, pushing it to $ 40.34 a barrel. Yesterday, its value stopped at a growth of 0.9% or 0.36 dollars. While the raw materials hold the defense and did not fall below strategic importance for the further strengthening of the mark of $ 40 per barrel. However, the market is now beginning to face serious external pressure, which could lead to even more powerful subsidence.
Some support for black gold does exist. So, it is worth waiting for from the side of reducing raw material production in the United States. Earlier it was reported that the mining companies tried to take advantage of the increase in oil prices in order to earn and win back the opportunities lost in the crisis. For this purpose, previously frozen production was resumed. However, it has now become clear that prices just above $ 40 per barrel are clearly not enough to start large-scale production. The largest companies came to the conclusion that increasing production will not only not save them from accumulated debts, but will also have a very negative impact on the world market and prices, respectively, which will complicate their work in the long term. In this regard, corporations decide to abandon the launch of additional stations until better times,
According to the United States Department of Energy, oil production in the country declined significantly in the first month of summer, reaching 10.5 million barrels per day. Recall that in March it was at around 13 million barrels per day. In just eleven weeks, it was possible to significantly reduce production, which was a record for the pace.
OPEC countries also support the current trend, which is already having a positive effect on the global raw materials market. The price of oil has strengthened well, which means that the organization's policy and its actions under the agreement on the reduction of oil production have borne fruit. Nevertheless, while prices have not been able to reach even last year's level for the same period.
In the future, the prospects for the increasing demand for raw materials remain very vague. So far, only one thing is clear: as long as the epidemiological situation in the world is not stabilized, the oil market has a significant pressure factor, which will be very difficult to overcome.
