On Wednesday morning, the price of oil continues to fall amid a report by the American Petroleum Institute (API) on a significant increase in raw materials stocks in the United States.
To put it simply, the price of May futures for North Sea Brent crude oil sank by 0.8% and hit $66.98 per barrel, while the price of April futures for WTI blend dropped by 0.66% and reached $63.59 per barrel.
A day earlier, the April futures for WTI crude oil fell by 1.6% and hit $64.01 per barrel, while the May futures for Brent crude fell by 1.1%, having reported $67.52 per barrel.
On Monday, the price of WTI crude oil was growing steadily, and Brent quotes crossed the $71 mark for the first time since 2019. But later, this enviable enthusiasm for oil prices went into decline due to a rise in treasury bond yields, which provoked the strengthening of the dollar to a more than three-month high.
According to API data, commercial reserves of black gold in the United States increased by 12.8 million barrels over the past week. A week earlier, the volume of raw materials resources soared to the highest level in the entire history of observations – by 21.6 million barrels.
Oil prices reacted no less painfully to the growth of the dollar. Traditionally, a stronger dollar makes commodities less available for purchase in other currencies. By the time of writing this, the dollar index increased by 0.23% to 92.17 points, updating the record of the end of November last year.
Experts expect that in the short term, the demand for black gold will increase, and production will continue to fall. So far, oil prices have shown a monthly increase since November 2020, when the cost of raw materials soared due to vaccine optimism. On the eve of this euphoria, world prices for black gold were at the level of $35-37 per barrel. Furthermore, the positive dynamics of oil was supported by hopes for an early recovery of the economy and demand, as well as coordinated measures of the OPEC alliance to limit oil production. Saudi Arabia's decision to voluntarily reduce its supply by 1 million barrels per day also played a significant role here.
