2016-11-10 12:14:34

Yesterday's volatility and instability of global financial markets caused by the US presidential election, has also affected the oil market. Yesterday, oil prices fell to the new lows for this month (44.40 per barrel of crude oil Brent), but soon investors’ risk appetite had increased and price went up again. The new President of the United States, Donald Trump intends to ease restrictions on production of the energy resources in the country, approve the draft of the Keystone XL pipeline and cancel billions of dollars investments in the programs of the United Nations on climate change. Such steps will support oil production in the United States.

Oil producers in the United States try to take advantage of the rise in oil prices, which is demonstrated by the weekly growth in the number of active drilling rigs in the United States.
There were 450 rigs last week.

Earlier this week, Energy Information Administration of U.S. Department of Energy has upgraded forecast for oil production in the country. According to a new forecast, oil production in the United States this year will amount to 8.84 million barrels a day; next year production will reduce to 8.73 million barrels a day. Previous forecast supposed that in 2016 oil production would reach 8.73 million barrels a day, and in 2017 – 8.59 million barrels.

According to the data released by the US Energy Department on Wednesday, crude oil inventories in the week of 29 October – 4 November increased by 2.432 million barrels. In the reporting week production of oil increased by 170.000 barrels a day to 8.7 million barrels a day.

Attention of the market participants will be focused on the OPEC meeting devoted to reduction of oil production, which will be held on November 30. It is expected that at this meeting, OPEC will agree to limit oil production to 32.5-33 million barrels per day.
Many market participants are skeptical about the OPEC agreement to reduce oil production. Even if the agreement is signed, there is no guarantee that OPEC members will fulfill their obligations. Many economists believe that oil prices may soon drop again.

Tomorrow at 21:00 (GMT+3) oilfield services company Baker Hughes will issue report on active drilling rigs in the USA, which is an important indicator of activity in the US oil sector. This data has a strong impact on the oil prices. Currently, the number of the active drilling rigs in the USA is 450.