2016-10-20 12:52:27

Traders in the oil market prefer to place take profit orders today after the recent increase in oil prices caused by the information from the US Department of Energy about the reduction in oil reserves in the country.

At the beginning of European trading spot price of crude oil Brent session was at the level of $52.00 per barrel.

Yesterday the price of crude oil Brent soared up to the level of $53.00 per barrel after the release of the weekly report of the US Department of energy, showing that oil inventories fell by 5.2 million barrels against the forecast of the rise by 2.705 million barrels.

Nevertheless, commercial oil stocks in the USA still exceed 468 million barrels, which is by 5.4% higher than a year ago and by 31.5% higher than the average level in the past five years.

At the beginning of this month at the meeting in Algeria OPEC countries reached preliminary agreement to cut oil production to 32.5 – 33 million barrels per day, reducing production by 1% - 2% from current record levels. After the speech of the President of Russia Vladimir Putin at the World Energy Congress in Istanbul, the price of crude oil Brent soared up to a level of 53.70. Oil price has grown by 18% in less than a month.

However, many market participants are skeptical of this agreement. It is expected that the discussions of the agreement and final document will be signed at the OPEC meeting on November 30. Meanwhile, oil production in Iran, Libya and Nigeria will not be limited. Even if the agreement is signed, there is no guarantee that OPEC members will fulfill their obligations.

On Friday at 20:00 (GMT+3) oilfield services company Baker Hughes will issue a report on the number of active drilling rigs in the United States. This report is an important indicator of the state of the US oil sector. It has strong impact on the oil prices.

At the moment the rise in oil prices is prevented by the rise in the USD and existing excess of oil supply over the demand.

The number of the active rigs in the United States has been increasing in the past 15 weeks. Last week their number was 432, which is also a negative factor preventing the rise in oil prices.Brent: Investors are taking profit.  Fundamental analysis for 20/10/2016