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Brent drops to $ 63.2

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Brent drops to $ 63.2
July 29
09:00 2019

On Monday, the oil price is falling slightly after it grew last week.

Half an hour ago, Brent’s contracts for September were sold on the London Stock Exchange for $ 63.2 per barrel. This is almost 30 cents below the price at which the market closed on Friday. At previous trading, the price was increasing very sluggishly. It grew only 7 cents and finished the session at $ 63.4.

At the same time, WTI crude oil at American NYMEX showed a slightly smaller drop. September futures were down only 13 cents. The price was equal to 56.07 US dollars. On Friday, the quotes rose about 20 cents, reaching a value of $ 56.2.

Last week, Brent grew 1.6%, WTI – 1%. Despite this, there was a decline in quotes for both brands in July.

Last week, the price was supported by the report of the Ministry of Energy, which reported on a decrease in fuel reserves in the United States. By the way, the reserves have been decreasing for six weeks in a row. The drop has amounted to 10.8 million barrels. This figure has tripled the forecasts of experts.

In addition to the stocks, production has also declined by 700 thousand barrels per day. This is the largest reduction in the production since 2017. Undoubtedly, the main reason is halting production in the Gulf of Mexico.

News from the Middle East has also had an impact on the market. So, the Iranian authorities arrested a tanker flying the British flag. Previously, Gibraltar authorities had detained the ship Grace 1 on suspicion of supplying Iranian oil to Syria, circumventing European sanctions.

On Friday, there was a message that Iran had tested ballistic missiles. CNN reported that the rocket had been launched on Sunday night and had overcome a thousand kilometers. The missile did not pose any threat to US bases or its ships. US Intelligence believes it was Shabaab-3. With its help, Iran tested the range and accuracy of weapons.

The market has also reacted to the news that the United States will send the Duncan warship to the Strait of Hormuz. Its task will be to ensure security in the strait together with the British Montrose.

The representative of Iran considers the plans for the deployment of the fleet in the strait to be hostile.

This week, investors will focus on a new phase of negotiations between the US and China. Representatives of the United States will go to China to resume the dialogue. In general, the market does not strongly believe that the meeting will be successful.

Analysts believe that the tense situation will soon be a regular player in the market.

 

The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group

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