Strong US NFPR for June, released last Friday, triggered the rise in the USD in the currency market. The USD continued to rise this Monday, especially at the opening of European trading session.
Last week, the price of oil significantly dropped. The price of crude oil Brent fell by 3.8 USD per barrel. Oilfield services company, Baker Hughes Inc. reported last Friday that last week the number of oil rigs in the USA rose by 10 units and amounted to 351 units that was one of the most significant weekly growth over the past six months.
The increase in the number of oil rigs is considered as one of the signs that the US producers of shale oil with the lower cost of production will gradually return to the market. This will have a negative effect on the ratio between supply and demand of oil in the world and oil prices.
After reaching the thirteen-year lows in February, the price of crude oil Brent rose by 95% in early June, approaching the level of 52.80 USD per barrel. That was the main factor causing the resumption of shale oil production in the United States and increasing production of oil in the world. Disruptions in supply of oil in various regions of the world also contributed to the increase in oil prices.
However, it seems that movement direction in oil prices is changing amid the increase in oil production in the USA, the rise of oil and oil products reserves in the US oil storages, crisis in Europe caused by Brexit, and increasing uncertainty in the global economy. The EU countries consume about 15% of the world's oil, while investment interest in the region remains unsteady.
On Tuesday at 22:30 (GMT+2) American petroleum Institute (API) will release report on changes in oil reserves country for last week.
On Wednesday Chinese trade balance for June will be published and the weekly report by US Department of Energy (16:30 GMT+2).
And on Friday, Chinese government will announce GDP growth in Q2. It is expected that Chinese GDP will fall In Q2. According to the forecast, GGDP will drop by 6.6% against 6.7% a quarter earlier. Industrial production in China will decline to 5.9% in June compared to the same period last year, and the value of 6.0% in May. This fact will also have a negative impact on oil prices.