Analyst: Volatility in the oil market increases

the World commodity market “again sells”, and volatility expands again, for which “there are many reasons”. This opinion was expressed IATS senior analyst “Alpari” Anna Bodrov.

According to her, the evening of Thursday, a barrel of benchmark Brent crude remained under pressure and was worth $39,70. This morning oil prices rose, however, for “black gold” “matched multiple minor catalysts”, says the review expert.

“the First and foremost is the global flight from risk: bidders continue to monitor the indicators on the number of new infections by coronavirus and see is not what we would like,” — emphasizes Bodrov, adding that “shrinking economies is the risk for oil and the price of it”.

“the Second negative catalyst lies in the presents data on reserves of “black gold” in the United States. Fresh statistics from the Ministry of energy has mirrored the growth of oil reserves by 1.4 million barrels versus forecasts for an increase of 0.3 million barrels. Informed and API (American petroleum Institute — ed.) shown by the figures on commercial stocks, where oil reserves have expanded by 1.8 million barrels,” notes the analyst.

Third, it is estimated that moment, “crowning pressure on commodities, is the new attempts by the US to fight with China and strengthen another act of trade war”. “This forces players to get out of long positions on oil, because in case of aggravation of geopolitical relations between the giants of the demand for raw materials will decrease”, — says the expert.

In her view, “when such introductory Jul for of oil could be active, moving and very emotional.” “A barrel of Brent could trade in the range of $35-45, global oil producers it is very important that the price did not go below $35 as PAgives the profitability of production,” says Bodrov.

we also Recall that since the beginning of this year on the global oil market rode several waves of falling prices for “black gold”. A negative situation was caused by a whole complex of factors: a General overproduction of raw materials, a sharp drop in demand due to the rapid spread of coronavirus infection COVID-19 (March 11, was declared a pandemic) and concerns about its impact on the global economy and the collapse of the deal, OPEC+ (officially from April 1, but in fact, after fruitless negotiations of the countries-oil producers at a meeting on March 6 in Vienna).

However, on April 12 OPEC+ agreed on a new deal, joined by 23 States. The agreement will be valid for two years, from may 1, 2020 to may 1, 2022-th. In may—June this year, the production cuts will amount to 9.7 million barrels per day (from October 2018), then — until the end of 2020 — 8 million barrels, and 6 million by the end of April 2022. New business OPEC+ was a forced reaction of oil producing countries on the situation in the market and pressure from the United States. Overall, however, it is not blocked volumes decline in global demand, besides on the market have accumulated huge reserves of raw materials.

At the meeting on June 6, the member countries of OPEC+ extended on a month — until the end of July — the period of validity of the agreement to reduce oil production to 9.7 million barrels per day.

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