The oil market showed negative dynamics on Monday. This was contrary to the activity on the last working day last week where the oil showed good steady growth, which even allowed it to finish trading with the maximum weekly increase in value, which has not happened since June of this year. The positive mood of the investors was in light of the news from OPEC which stated that the countries participating in the agreement to reduce the production of black gold fully support the planned course and will try to fulfill their obligations under the contract in full.
The negative emotions among private market owners are caused by the level of coronavirus infection in the world. Investors are closely monitoring this indicator since it fully affects the process of global economic recovery, and therefore the process of restoring supply and demand in the oil market. The pandemic is not over, and the market perceives all changes in the number of infected people with extreme sensitivity. According to the latest data, the total number of COVID-19 cases in the world as of present is about 31.22 million.
Nevertheless, one of the most important events of the past week, which ultimately acted as a supporting factor for the raw materials market, was the meeting of the OPEC Joint Ministerial Monitoring Committee (JMMC). The committee has decided to grant a deferral to those countries that have not yet compensated for their oil production arrears. The deadline for compensation is now set at the end of the current year. The debtor countries expressed their readiness to work and eliminate the debt in the specified time period. So, Saudi Arabia announced that by the end of the year it will be able to cope with the accumulated debts for the production of black gold. Of course, such news is positive for market participants, since due to an additional reduction in production, the level of supply and demand in the market will be leveled,
However, OPEC said that the countries participating in the agreement should not relax and should be ready to take further measures that can stabilize the black gold market if there are good reasons for this.
The price of futures contracts for Brent crude oil for November delivery on the trading floor in London fell 0.81% or $ 0.35, which forced it to move to the level of $ 42.80 per barrel. Last week's trading session ended in the red zone with a drop of 0.4% or $ 0.15.
The price of futures contracts for WTI crude oil for delivery in October on the electronic trading platform in New York went up by 0.88% or $ 0.36 on Monday. Its current level is still located at $ 40.75 per barrel. An increase was also noted on Friday's trading session by 0.3% or $ 0.14. Thus, crude oil has gained a foothold above the strategically important mark of $ 40 per barrel, which is already a good sign for investors.
Nevertheless, at the end of last week, both brands of crude oil showed a rise in value. Brent increased 8.3%, and WTI went even higher with an increase of 10.1%.
The initiative in the crude oil market is still on the side of the buyers, so we should hope that prices will rise. The only question is what will be the fundamental news that will reflect a specific increase in the price of oil. Some experts believe that the bullish trend will continue throughout the week, which will allow raw materials to jump even above the $ 45 per barrel mark.
