On Monday, oil prices showed strong growth amid the continuing supply interruptions in some regions of the world, decline in oil reserves in the US, as well as reduced likelihood of rate raising in the US in June. Another decline in the US oil inventories was reported last week (by 1.366 million barrels, in addition to the decline in the previous period by 4.226 million barrels).
Interruptions in oil supplies from Nigeria and Canada have caused a reduction in the oil supply on the world market by more than 3 million barrels per day.
As expected, the OPEC meeting that ended last week did not result in any limitation or freezing of oil production. The current quota of 30 million barrels per day was established back in 2011. The cartel itself thinks that the demand for oil will remain stable and this year will grow by 1.2 million barrels per day. At the same time, according to the cartel, the oil reserves in non-OPEC countries are decreasing.
The OPEC's strong belief in the growth of oil demand in the world is confirmed, in particular, by the fact that state oil company of Saudi Arabia, Saudi Aramco, raised the prices of oil varieties produced in the country for the Asian countries and the USA.
Yesterday, oil prices reached their highest level in nearly 10 months and came close to the level of $50.80 for Brent oil.
However, the price growth causes early signs of resuming drilling activity in the US. Many producers of shale oil with the production cost of 30-50 dollars per barrel are likely to resume oil supply, which will increase the market supply and drop the oil prices.
If this trend continues to develop, it will again cause a fall in prices as supply exceeds demand.
Today at 22:30 (GMT +2), the American Petroleum Institute (API) will release its weekly report on oil inventories. And tomorrow (16:30) the US Department of Energy will publish the official weekly data on US oil inventories.