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Oil recovers after yesterday’s fall

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Oil recovers after yesterday’s fall
May 07
09:00 2020

As of 8 a.m. (Moscow time), July contracts for the European Brent crude oil have grown by $ 0.17 (0.57%) to $ 29.89 per barrel. We recall that yesterday, the asset dropped by 4% ($ 1.25) and closed the day at around $ 29.72 per barrel.

At the same time, the June futures for WTI crude oil have risen by 0.83% and cost $ 24.19 per barrel. The American crude oil significantly declined yesterday too. It lost 2.3% and closed the session at $ 23.99 per barrel.

The U.S. Department of Energy has published the latest information on the volume of oil reserves in the United States. It turned out that over the week storage facilities had been replenished by 4.59 million barrels of oil, while gasoline inventories had decreased by 3.16 million barrels; distillates had increased 9.52 million barrels. Analysts were not mistaken in their forecasts. However, they went wrong a little, when calculating the increase in stored oil. Experts believed that oil reserves would increase by 7.1 million barrels. The correction of the asset was caused by the smaller than estimated increase in stored “black gold”.

Analysts believe that full rebalancing in the energy market should be expected no earlier than in six months.  Consistently low demand while maintaining oversupply is the reason for such deadlines.

 

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

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