Oil market. Prices could not rise above $ 115
On Wednesday, oil quotes have grown, but in the afternoon, after publishing a report on oil reserves in the United States, part of the growth was won. The focus remains in demand in the largest consumers of fuel in the world: USA and China.
Today, Brent quotes are reduced by losing the acquisition of yesterday. Two days in a row price cannot rise above $ 115 per barrel, demonstrating weakness inside a large converging triangle. The breakdown of one of its borders can be a precursor of impulse movement towards breakdown.
Oil reserves in the USA
Oil reserves in the United States decreased by 3.5 million barrels., While gasoline and distillate reserves increased by 0.8 million and 1.4 million barrels. respectively. Forecasts suggested reducing petroleum products, so the data cannot be fully called positive.
Production in the United States grew by 100 thousand b / s to 11.7 million b / s after 7 weeks of stable values. Clean imports grew by 0.6 million, to 3.3 million b / s. Cumulative supply of petroleum products, an indirect demand indicator decreased by 1.2 million to 19.9 million b / s. The average supply rate for 4 weeks is consistently reduced.
A combination of factors NEGATIVNA statistics for oil prices. The offer has grown, while demand is slightly weakened. This can be both a one-time share and the beginning of a new trend if the weakening of demand is associated with the destructive action of high prices. After publishing a report, prices decreased, although the pronounced impulse was not observed.
This week OPEC + again will gather to determine the production Policy for May. The basic levels on which the level of reduction is counted will be increased by 1.6 million Used, but the monthly growth of quota will be agreed by 400 thousand b / p. In the quotes of oil prices, it is this scenario.
For Saudi Arabia and Russia, the base level will be elevated from 11 to 11.5 million b / s. For the UAE, the increase will be from 3.2 to 3.5 million b / s, for Iraq – from 4.65 to 4.8 million b / s, for Kuwait – from 2.8 to 2.96 million b / s.
According to the results of February 2022, the level of execution of a transaction to reduce production by OPEC countries was 136%. In absolute values, production lagging behind 1.05 million b / s from the target level. Probably, in March, this lag could preserve or grow a little.
Sale of oil from SPR
Today, oil prices are declining against the background of reports that the US Presidential Administration is considering the possibility of release from a strategic reserve of about 1 million barrels per day for several months to stabilize the situation in the oil market.
This is a large volume equivalent to 1% of the daily oil consumption in the world. This measure could temporarily cool the oil market, but it will not help to eliminate the structural deficit. In the event that the deficit of the supply will be longer, the United States may be in a difficult position. Therefore, the solution looks difficult. It is expected that today will be published a more detailed plan for the actions of the United States in the oil market.
This morning, Brent futures fall at 4.7% to Friday’s closure levels and traded around $ 111.3 per barrel.