Oil risks resuming its decline

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Arseniy Dadashev, AUFI 13 September 2021 12:25

Over the past week, oil has been trading unevenly under the influence of ambiguous factors. However, thanks to Friday's growth, Brent was able to reach a small plus at the end of the five-day trading period, settling slightly below the level of $73 per barrel.

The bullish potential of black gold quotes was restrained by risk aversion, which prevailed on financial markets due to the tightening of the Fed's rhetoric, combined with concerns about the health of the global economy against the background of the ongoing pandemic. In these conditions, the dollar was in protective demand, which served as another obstacle for Brent.

Meanwhile, the industry statistics turned out to be ambiguous. The API report reflected a drop in crude oil reserves by almost 3 million barrels, while the official estimate of the Ministry of Energy was twice as modest. At the same time, the drop in production in the United States by 1.5 million barrels per day was ignored at once, because it was caused by a temporary factor – Hurricane Ida, which swept along the coast of the Gulf of Mexico.

In the short term, there are prerequisites for a resumption of price declines. Firstly, Baker Hughes data indicated an increase in the number of active drilling rigs last week increased by another 7 units and now exceeds 400 units again. Secondly, JPMorgan experts lowered their forecast of global oil demand for the second half of 2021, warning of the risks of further deterioration of the situation.

Arseniy Dadashev, Director of the Academy of Financial Management and Investment

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