2016-07-05 12:39:26

After the rapid growth of the world stock indices, and the rise in commodity prices, including oil last week, the market has reversed to the phase of correction. Yesterday, the USA celebrated the Independence Day, so US financial markets were closed. With the opening of today's trading session, stocks indices are going down. oil prices are also sharply declining.

The price of crude oil Brent fell below the psychologically important level of 50.00 USD per barrel. Last week, OPEC authorities and representatives of Saudi Arabia said that the balance between supply and demand in the global oil market is regaining.

However, the rise in oil prices can quickly shift to the decline. Although it was announced that oil production is the USA had declined (last week US Department of Energy reported that oil production in the country fell by 55.000 barrels to 8.622 million barrels per day), the rise in oil prices may easily stop.

Last Friday oilfield services company Baker Hughes Inc., said that last week the number of oil rigs in the USA increased by 11 units and amounted to 341, which was the most significant weekly growth in six months.

Market participants have not yet comprehended the decision of the UK to leave the EU.

On Wednesday at 22:30 (GMT+2) American Petroleum Institute (API) will release a report on changes to the oil reserves in the US for the last week. On Thursday at 17:00 US Department of Energy will publish a weekly report on oil and oil products stocks in US warehouses.

If the data indicates a rise in reserves, prices will go down and otherwise.

Fundamental factors, which creates high risks for the European and world economies include: the increase in the number of operating drilling rigs in the United States, possibility of the resumption of shale oil production in the United States, elimination of disruptions in oil supplies in various regions of the world, continuing oversupply of oil in the world, which has reached the historic highs, oil reserves in the United States, which exceeds 500 million barrels. They can trigger the resumption downtrend in the oil market.

Brent: The price is going down.  Fundamental analysis for 05.07.2016