FX.co ★ Oil prices decline after reaching a high record

Oil prices are steadily declining on Friday afternoon after reaching another high since March 5 this year. During that time, there was a collapse in commodity prices due to the fact that on March 6, OPEC+ members could not reach a compromise on adjusting the parameters of the agreement on reducing oil production.

Around noon, the price of February futures for the North Sea Brent blend fell by 0.36% to $50.08 per barrel, and the January futures for the WTI blend lost by 0.13% to $ 46.7 per barrel.

Such dynamics were outlined after the maximum increase in oil prices on Thursday. However, in the interval between the confident growth on Thursday evening and on Friday morning, the black gold market managed to spectacularly fail several times. Recall that a day earlier, the price of a barrel of Brent crude reached $51.

Investors continue to react violently to any news of the COVID-19 vaccine. And almost everyday the media report on new approval processes for the development of pharmaceutical giants. For example, on Thursday, a committee of experts under the US regulator FDA voted to use a vaccine from Pfizer and BioNTech. Previously, the drug of these companies was approved by the Ministry of Health of Canada. The vaccination process in America could begin as early as next weekend.

Despite the promising news, the lack of practical results from vaccine use gives investors considerable uncertainty about the recovery in oil demand. This, in turn, provokes such periodic corrections. An additional portion of negativity is also inspired by the frightening news about the uncontrolled growth of COVID-19 cases in the United States and the world. According to Johns Hopkins University, about 70 million people worldwide fell ill with coronavirus, more than 1.5 million died. The tensest epidemiological situation remains in the United States.

Frightening statistics, however, do not prevent market experts from arguing that oil prices will rise in the short term. The upward trend is associated with the confident recovery of the Asian economy, in connection with which the consumption of oil in China and India is increasing.

In addition, market participants even ignored the information released on Wednesday about an unexpected increase in US oil reserves by 15.2 million barrels. So, there was an active growth in the black gold market on Thursday. Analysts attribute this atypical investor behavior to high hopes for vaccines that could accelerate demand growth and establish North America as one of the largest oil consumers.