Oil prices have been rising for eight consecutive sessions. And today we see a decline in quotes for black gold.
Brent is being currently traded on the London Stock Exchange ICE Futures for $ 49.4 per barrel (the decline equaled $ 0.28 or 0.56%). As for WTI crude oil, the August futures price on the New York Mercantile Exchange NYMEX dropped to $ 46.83 per barrel ($ 0.24 or 0.51%). In general, oil price showed a decline of about 14% for the first half of 2017. The main reason is the broken balance of supply and demand in the energy market. The market is worried that even the OPEC countries’ agreements on limiting production are not able to restore the lost balance.
The last week increase in oil prices was caused by a decrease in the number of operating drilling rigs in the United States. In addition, the US Department of Energy released the information on the reduction of national oil production by 100,000 barrels per day.
Perhaps the decline is due to the natural disaster in the Gulf of Mexico. However, some analysts believe that the hurricane is beside the point and the decline is caused by the planned reduction in extraction and production in the United States.
Despite the agreements reached by the OPEC countries, June turned out to be the record month for oil production in 2017. This is due to the fact that Libya and Nigeria (not participating in the agreements on the reduction of production) significantly increased oil production.
Most likely, oil prices will continue to fall in the near future. The balance between production and consumption should not be expected quickly.
The material was prepared with the participation of Andrey Majorov,
a leading analyst of the brokerage company CT Trade