The cost of crude oil this morning has remained virtually unchanged since yesterday. Market participants are in no hurry to choose a direction for further actions since they have not yet figured out the signals for reducing production. In addition, the prospect of a return of demand for raw materials to their previous course also remains rather vague. On the one hand, quarantine measures are gradually being lifted, on the other hand, there is a threat of a pandemic recurring amid news of an increase in the number of cases in the USA and China.
As it became known yesterday, the largest oil refinery in the UK, BP, has changed its forecast for the cost of Brent crude oil downward. So, the price should be reduced from $ 70 per barrel to $ 55 per barrel in the long term. At the same time, company analysts note that COVID-19 will seriously affect the future demand for black gold, which will lead to a worsening situation in the oil markets and, as a result, will entail more serious consequences in the global economy. The company itself has made a statement that it intends to freeze a number of its oil and gas fields since it considers it inappropriate to produce, while the cost of raw materials is in such low ranges.
The negative effects of low demand and oversupply on the market have already been felt by another major shale oil company in the United States which is the Extraction Oil & Gas. The management decided to begin bankruptcy proceedings, the relevant documents have already been filed with the court. This, of course, caused unpleasant emotions among market participants.
A positive effect is expected from news from Iraq. According to the latest data, the state decided to make an additional reduction in oil production, necessary to fulfill obligations under the agreement with OPEC.
Nevertheless, the increase in demand for black gold is limited by very real concerns about a new wave of coronavirus infection. Over the weekend, the United States and China were able to detect new infections that hinted that the situation with quarantine measures could be repeated. Fears are also supported by a surge in the number of cases in Latin America. However, experts were quick to reassure the market, which had already begun to panic, by the fact that no new closure of the economy was expected in the near future. In this regard, participants should pay more attention to building a balance between supply and demand.
The price of Brent futures for August delivery on the London trading floor slightly advanced this morning by 0.08% or 0.03 dollars. Thus, raw materials began to cost $ 39.75 per barrel and again came close to the strategic mark of $ 40 per barrel. Recall that yesterday's trading ended with an increase in its value by 2.56% or 0.99 dollars, which sent it to the level of 39.72 dollars per barrel.
The price of WTI light oil futures for July delivery on an electronic trading platform in New York also showed minimal growth this morning by 0.03% or $ 0.01, which moved it to the mark of $ 37.13 per barrel. Yesterday's trading ended with a steady increase of 2.37%, or 0.86 dollars, which reflected a rise to the level of 37.12 dollars per barrel.
Positive moments in the black gold market were found. They were the statistics provided by the analytical company Vortexa. According to their calculations, the general level of stocks of raw materials in immobilized tankers as in storage decreased quite significantly last week. By Friday last week, it was at around 176.08 million barrels, which is 4.4% lower than the previous level. Nevertheless, in comparison with the indicator for the same period last year, the growth remains colossal with 260%.
The highest reduction was recorded in the Gulf of Mexico by 58%. Much less, but still, stocks fell well in West Africa by 22%, the Middle East by 15%, and Europe by 13%. This, of course, could not pass by investors who were a little inspired.
