Conflicting data and statements of representatives of major oil producing countries continue to shake the oil market. Since the beginning of August the price of Brent oil rose by about $7 per barrel, rebounding from the support level near 41.70.
Prices on Tuesday rose to a new monthly high amid the news that Russia is planning a meeting with the members of OPEC in October. The news strengthened the hope that the major oil producers will agree to limit production.
Once reached local highs yesterday near the level 49.30, today's oil prices are declining moderately.
The indications that Iran probably will not participate in the September OPEC meeting (26 - 28 September) indicate that the meeting in Algeria could end up without any action to stabilize the oil market. Iran intends to enter the pre-sanction level of oil production in the amount of approximately 4-4,2 million barrels a day. And, as reported yesterday by representatives of the country, the oil production in Iran is not likely to reach this level before the OPEC meeting time.
On Tuesday, a spokesman for the Iranian Oil Ministry said that Iran has not yet decided to participate in the September OPEC meeting.
The optimism regarding the agreement of the major oil-producing countries to freeze production can also quickly melt away as it appeared after earlier statements by the Minister of Energy of Saudi Arabia and the optimistic forecasts of the International Energy Agency (IEA) on the possibility of reducing the excessive world oil reserves as a result of high demand.
Let us recall that the oil price began its sharp increase after the statement of the Minister of Energy of Saudi Arabia Khalid al-Falih last week that his country is ready to carry on the oil market stabilization measures and join the OPEC decisions to freeze production levels. Minister of Petroleum of Nigeria, which is also a member of OPEC, said Monday that the probability of reaching an agreement in September is low.
The support for oil prices is also lent by the weakening US dollar amid the weak expectations of relatively soon rate hikes in the United States. According to CME Group, futures on interest rates account for 18% probability of a rate hike in September and 51% probability of the Fed tightening policy in December.
The participants of the oil market are waiting for the weekly data on oil and oil products reserves in the US, which will be released today at 17:30 (GMT + 3). In recent weeks, the cumulative US oil and oil products reserves grew, and their further increase can put pressure on the prices.
Also, the attention of the financial markets will be focused today on the publication at 21:00 of the minutes of the Fed meeting, which was held July 26-27.
If the minutes contain signals of the possibility of a rate hike in September, the dollar will strengthen sharply on the currency market. In this case commodity prices, including oil, can get a downward trend.