The most important factor contributing to the rise in oil price is the interest rate decision by the US Fed. As it became known the US Fed has left interest rates unchanged in the range of 0.25% - 0.5% and lowered forecasts for the further increase of the rate, showing that by the end of 2017 the rate will be at the level of 1.875%, and by the end of 2018 - 3%. Although it was planned earlier that the interest rate will be raised up to 2.375% by the end of 2017 and up to 3.25% by the end of 2018. It is expected that the interest rate will be raised twice within this year up to 0.875% against the previously planned level of 1.375%.

The USD has declined significantly all over the market after this decision by the US Fed.

The price of oil has been growing despite yesterday’s data, released by the US Department of Energy showing that oil reserves in the USA have grown by 1.317 million barrels, which was above the forecast of +3.328 million. However the same data shows the decline in oil production in the USA to 9.07 million barrels per day versus 9.08 million barrels a week earlier.

Oil prices have been supported by yesterday’s news that OPEC and other large oil producing countries agreed to hold a meeting in Qatar on April 17. According to information from OPEC Saudi Arabia and other major oil exporters can reduce oil production despite Iran, which refuses to freeze oil production until reaching prior to sanction level of 4 million barrels per day. Now, the date and the place of the meeting have been specified, which gives a hope that agreement on reduction of oil production will be reached.

Therefore, there are strong grounds to believe that the price of oil will continue to grow. At least, it is possible that before 17 April, the price of crude oil Brent will consolidate above the levels reached in the last two days at 41.00 - 41.50 USD per barrel.




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