The price of crude oil on Monday morning showed a decline that followed a steady rise after last month's results.
The price of black gold has come under significant pressure amid US President Donald Trump's speech. A statement criticizing China's actions came on the last business day last week. Trump intends to deprive Hong Kong of the status of a global financial center since it can no longer be considered territory independent of the Chinese side. Recall that the Chinese authorities decided to develop a bill protecting the national security of Hong Kong, which did not appease Washington.
Despite the fact that theUS is determined to wage an uncompromising struggle, the US president did not say anything about the retaliatory measures in the field of trade, which were so eagerly discussed earlier. It added positive and support to the markets.
In addition, the news of American statistics also positively affects the situation. As it became known last Friday, the drilling rigs in the country, continuing active work on the extraction of oil raw materials, decreased by 17 pieces last week. Thus, the 301 drilling station continues its work today. The number of oil rigs also decreased last week by 15 units, 222 were left.
It was not possible to expand the dynamics in the opposite direction on the oil market even against the background of the participants' fears after China announced that it was ready to repel American attacks by introducing countermeasures. According to Chinese officials, the bill that the United States is now trying to ratify in relation to China is extremely offensive, which is essentially direct interference in the country's internal affairs. While investors in the black gold market pretend that they do not notice this verbal skirmish between the leading economic powers of the world, a correction can begin at any time, which will be caused by growing negativity and the aggravation of the conflict.
Many experts note that the growth of oil quotes is now taking place on very controversial grounds, which can unexpectedly stagger and disappear. So, market participants practically didn't react at all to the fact that oil reserves in the United States became larger, and also to the fact that OPEC member countries are not too keen to comply with agreements on reducing raw material production. Recall that two months ago, an agreement was signed, according to which there should have been a significant (9.7 million barrels per day) decrease in oil production.
Since May 1, the contract has entered into force, its validity lasts two months. Thus, market participants are looking forward to the next meeting of OPEC countries, scheduled for June 10, where they will raise the question of continuing this policy or its termination. It's already clear that not all states were quick to reform their oil production. So, the most record reduction occurred in Saudi Arabia, where April of this year, the country produced only 11.7 million barrels per day. But countries such as Iraq and Nigeria were in no hurry to reduce their production. They complied with only 38% and 19% of the agreements that were accepted earlier.
On the whole, in May it was possible to fulfill the conditions of the signed agreement by only 74%, which, however, can be considered a good result, especially since it provided visible support to the oil market and corrected the rapidly falling demand for oil products. They complied with only 38% and 19% of the agreements that were accepted earlier.
The new OPEC meeting is the new agenda of the traders at which, in particular, the extremely exciting issue for the black gold market will be discussed on Russia's withdrawal from the agreement to reduce production. At the moment, there is reason to doubt that Russia will want to extend the term of this agreement, which will force an even greater reduction. According to some reports, the meeting may be postponed to an earlier date - on June 4 and 5 of the current year. And this may mean that this week will be difficult for the oil market in all respects since there will be a lot of pressure and it will be multidirectional.
Over the past month, WTI crude oil has become 88.4% higher in value, and this is the highest growth in the history of observations over the month. Brent crude oil also rose well to 39.8% per month.
Today, on a trading floor in London, the price of Brent futures for August delivery grew by 0.66%, which is $ 0.25 in cash. Thus, the current price was 37.59 dollars per barrel. This is still lower than the closing price on Friday when oil of this brand was at the level of $ 37.84 per barrel, which reflected an increase of 5%. July contracts also expired last Friday.
On the trading floor in New York, futures for WTI crude oil fell in value by 0.59%, or 0.21 dollars, this day which sent it to the mark of 35.28 dollars per barrel. Last Friday, before the weekend, its price rose by 5.28%, or 1.78 dollars, and reached the level of 35.49 dollars per barrel.
Thus, today there is a rather restrained and uncertain reduction in the cost of crude oil. However, OPEC will inevitably insist on continuing its policy to reduce production, which is likely to allow oil prices to rise to around $ 49 per barrel. At least, most analysts are counting precisely on this scenario.