Last weekend the countries that are part of the enlarged OPEC agreed to increase daily oil production by 1 million barrels, as long as the previously adopted agreements on limiting production were fully implemented. We recall that on Friday the decision to increase the production was taken by the member states of the cartel.
Experts from Goldman Sachs believe that an increase in production will not cause a large excess of black gold in the market. At the same time, the amount of free capacity will remain low.
Nevertheless, Brent crude showed a sharp drop in quotations. Oil of another benchmark WTI falls in price much less dramatically.
At the moment, the price of August futures for Brent crude (traded on the ICE Futures exchange in London) has fallen to $ 74.31 per barrel. Thus, at the moment the price drop is equal to $ 1.24 or 1.64%. We recall that following the results of the Friday session, contracts have risen by $ 2.5 (3.42%) to $ 75.55 per barrel.
The cost of WTI crude oil does not drop so rapidly due to the small amount of oil reserves in the USA. The oil reserves in Cushing (where the oil traded on the NYMEX exchange is physically stored) have been decreasing for five weeks. According to the analysts of the energy market, this is due to the start of the car season.
So, at the moment, the cost of the futures for WTI oil (with a deadline in August) on the New York Mercantile Exchange NYMEX has fallen by 0.12 USD to the mark of 68.46 US dollars per barrel. On Friday futures showed a very significant price increase: by 3.04 US dollars or 4.64% to the level of 68.58 US dollars per barrel.
The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade