Oil prices remain under pressure this week. According to experts’ estimates, Brent crude futures are likely to decline as the oil market depends greatly on the sentiment of the market participants who point at permanent oil supply glut.
The experts began to express concerns about oversupply after the US petroleum producers released their quarter reports. However, most of the companies are not going to cut oil production next year regardless of the forecasts. Meanwhile, the indicator remains positive despite falling shale oil production.
It turns out that the volume of oil drilling in the United States exceeds the forecasts for 2016, and the US crude oil market will remain oversupplied. In addition, Iraq has already started exports of crude oil on the US petroleum market. The analysts expect that such competition can incite a new wave of discounts and will influence oil prices.
Along with that, Saudi Arabia incurs losses on the Asian markets thus having the need to dump prices on all routes from the American to the European markets. It is worth saying that such ‘price war’ has already begun on the European oil market where the Saudi try to compete with the Russian dealers and sell oil at huge discounts.
Today, the main risk is that if the Brent crude oil price falls below $46 per barrel, the further decline will be inevitable. However, some analysts believe that the oil prices need to fall lower in order to make a rebound and reach higher levels.
