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The miracle did not happen. The USA increases production – energy prices fall

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The miracle did not happen. The USA increases production – energy prices fall
July 07
13:00 2017

A set of figures on oil production in the USA was available at the disposal of analysts last week. According to the report prepared by the US Energy Ministry, oil production increased by 88,000 barrels per day and amounted to 9.338 million barrels per day. Thus, the fall of the previous week (caused by the hurricane in the Gulf of Mexico) was replaced by the growth. Despite the increase in production, the US Department of Energy reported on the decline in inventory in the USA. The following figures say that:
– oil reserves decreased by 6.3 million barrels;
– distillates stocks fell by 1.85 million barrels;
– gasoline supplies dropped by 3.67 million barrels.
This is the largest inventory reduction recorded over the past 10 months.
Analysts expect an increase in oil shipment from countries, belonging to the OPEC cartel. The likely average supply volume for the month could reach 23.97 million barrels per day.
Nevertheless, the volume of oil reserves stored on tankers is quite possible to decrease to 465.93 million barrels.
The reduction in world commodity stocks, unfortunately, did not make a difference with the fall of oil quotations. Contrary to the experts’ expectations, the news about the increase in oil production has become more significant for the formation of the price of oil and oil products. According to analysts, the market should experience several weeks of the stable inventory decline, so that the price of oil will stabilize.
Meanwhile, the benchmark oil continues to become cheaper. The price of futures for September for Brent crude oil (at the London Stock exchange ICE Futures) had lost 2.9% by Friday afternoon – to $ 46.71 per barrel.
By the same time the price of the August futures for WTI crude oil (at the New York Mercantile Exchange NYMEX) had fallen by 3% – to $ 44.17 per barrel.

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

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