2016-07-22 11:33:45

Excess in oil supply, continues for the second year, over pacing a record seasonal demand for oil. Excess oil reserves exceeded even the record-breaking seasonal demand.
At the end of trading session on Thursday, futures for crude oil Brent fell by 0.6%, to from 46.91 per barrel, futures for diesel fuel fell in price by 0.7% to 1.3959 USD per gallon.
Due to the decline in demand for petroleum products at the end of the holiday season, the price of oil can continue to fall. Analysts expect the decrease in demand for oil from refineries in the next few months.

Oil prices continue to fall even after the information from the U.S. Department of Energy on Wednesday about the decline in stocks of oil in warehouses of the country by 2.342 million barrels in the week of 9-15 July. Although commercial oil reserves in the USA have been reducing for the 9-th week in a row, excess of the current reserves compared to the average level for same period in last 5 years amounts to 34.7%. Therefore, although oil stocks have reduced, they remain excessive.

Investors ' concerns about the slowdown of the economy in Eurozone and decline in oil consumption in this region are growing. Oil consumption fell by 15% of the total global supply.

Continuing rise in the USD and uncertainty in the global economy caused by Brexit, also contribute to the decline in commodity prices, including oil.

Today at 19:00 (GMT+2) oilfield services company Baker Hughes will issue report on the number of operating drilling platforms in the USA, which is an important indicator of activity in the oil sector of the US economy, having significant impact on the oil prices. Note that the number of the operating drilling rigs in the USA there has been steady increasing in the past 6 weeks. To date, there are 357 of them. If the number of the active drilling platforms in the USA continues to grow, oil prices will go down.

Brent: Oversupply of oil and oil products. Fundamental analysis for 22.07.2016.