After taking into account the sharp fluctuations in the past few days, the price of oil seems to find an equilibrium point, stabilizing at around 67 USD per barrel on Wednesday. The price of the January futures WTI rose by 0.52% to 67.23 USD per barrel despite continuing concerns about global glut of supply. Meanwhile the contracts on competitive Brent crude traded in Europe rose slightly by 0.11% to 70.81 USD per barrel. The market participants are waiting for the traditional weekly data on crude oil stocks in the US. The latest report from the American Petroleum Institute on Tuesday showed a drop of 6.5 million barrels.
The investors are waiting for today’s data Energy Information Administration to report growth of 915,000 barrels last week. The gasoline stocks are likely to rise by 820,000, while those of distillate fuels – with 36,000. The crude oil prices fell by nearly 40% over the past five months, taking into account the longest negative series of monthly losses since the crisis of 2008. The main reason is the sharp increase in demand, led by the “shale revolution” in the United States that substantially exceeds demand.
The reason for the recent setbacks in the prices of Brent and WTI became the decision of the Organization of Petroleum Exporting Countries (OPEC) to keep its production ceiling of 30 million barrels per day. The falling oil prices are unprecedented test for manufacturers of unconventional oil showed you on Monday by the International Energy Agency (IEA).
The producers of “black gold” in the United States compete hard in their actions with extraction of raw materials through the so-called. method hydraulic fracturing, even in conditions of lower oil prices. According to some experts, however, this process will be delayed namely pressure on already low prices, which could again push up the market in the medium and long term.