After numerous unsuccessful attempts, oil managed to hit a high of $50 a barrel. This time, it was really long and difficult climb. If not for the news about a drawdown in the US oil stockpiles, crude could reverse its trend.
The Energy Information Administration reported a 4.7 million barrels draw in the US oil inventories. In addition, gasoline stocks also contracted. This became the main and almost the only reason for the price increase. There are no more positive data in the market. The news about a draw in oil stockpiles is a rare occasion, while reports on production growth are released regularly. The US steadily expands production as oil producers gradually increase the number of active operating rigs. Despite a drawdown, the volume of the US oil inventories is still close to record highs. In addition, growth in prices is hampered by violations of the terms of the OPEC deal to cut production. Not only some oil producers do not fully comply with their obligations but also Libya and Nigeria, which were released from any restrictions, significantly increased production.
Given these circumstances and the general sentiment of market participants, we can expect a fall in oil prices in the nearest future.
