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Third time US oil prices have fallen in two weeks

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Third time US oil prices have fallen in two weeks
May 24
09:00 2018

For the third consecutive time in the past two weeks, the market has seen a drop in oil prices. The reason for the current decline was the surplus of oil reserves in the United States of America. Today, on the New York Mercantile Exchange, the cost of futures for crude oil CLN8 has fallen by $ 1.13, reaching $ 70.71 per barrel.

A price decline for Brent crude oil by 1.01 US dollars- to the mark of 78.79 dollars per barrel- was recorded at the European stock exchange ICE Futures Europe, which offers an electronic access to energy markets.

Yesterday, the US Energy Information Administration (EIA) reported that crude oil inventories had increased by 5.8 million barrels per week. Unfortunately, this information did not justify the forecasts of analysts from S & P Global Platts, who predicted a decrease in crude oil reserves by 1.7 million barrels.

Tariq Zahir, Chief analyst of the investment company Tyche Capital Advisors, noted that the increase in crude oil production at that time of the year was completely unexpected for the market.

The oil exporting countries reported that at the June meeting of the organization the situation on increasing oil production would become a subject of intensive debate. The concern in this matter is primarily due to the assumption of a possible reduction in oil production from Iran and Venezuela.

The forecasts of one of the world’s largest investment banks – Bank of America Merrill Lynch – on the oil shortage in 2018 improve the picture of the commodity market. In their opinion, the expected shortage of crude oil in 2018 will be about 630,000 barrels per day, and in 2019 – 300,000 barrels per day.

Analysts say that politicians have artificially created all the conditions for the  cost of crude oil to reach $ 100 per barrel in 2019.

 

The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade

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