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In the short term, oil clearly benefits

DATE OF PUBLICATION: 2021-01-13 13:58:18 The price of March futures for Brent crude rose above $ 57 per barrel. A similar level of Brent oil was last observed almost a year ago – on February 24, 2020. At the time of writing the review, a barrel of Brent is trading at around $ 56.53. WTI crude oil is trading at around $ 53.26 per barrel for February delivery, that is, it adds 0. 98%. The cost also reached its maximum values ​​- up to $ 53.74 per barrel. At this mark, WTI was last also traded almost a year ago – on February 20, 2020. The growth in the price of black gold is influenced by data on a larger-than-expected reduction in US oil reserves. The statistics came out clearly in a positive way. Thus, the American Petroleum Institute (API) provided data, according to which US oil reserves fell by 5.82 million barrels last week. Analysts on the eve predicted much lower figures, namely 2.7 million barrels. At the same time, gasoline reserves, according to the API, increased by 1.9 million barrels. The US Department of Energy will make an official announcement of data on this topic a little later. Analysts predict, on average, that the ministry will report a decrease in crude oil inventories by about 1.9 million barrels, as well as an increase in gasoline inventories by 2.1 million barrels. If these forecasts come true, then oil quotes will strengthen even more in their price positions. The quick reaction of the PRC authorities to the surge in coronavirus diseases in the northern province of Hubei also provided additional support to the oil quotes. Investors breathed a sigh of relief, not fearing a wider spread of COVID-19 and the subsequent decrease in oil demand. The current negative dynamics of the US dollar against other key world currencies is also important for strengthening quotations of black gold. Commodities and the US currency often show an inverse relationship. A weaker dollar makes oil, which is denominated in US currencies, more attractive to holders of other currencies. And, apparently, in the short term, luck will be on the side of buyers of black gold. And this, in turn, will affect the price of Brent, which may well exceed $ 58 per barrel. Market participants seem not to notice the continuing tough restrictions in many countries of the world and focus on the future, pinning high hopes on successful vaccination and the following confident recovery of the world However, certain risks for the oil market still exist, because factors such as a decrease in energy reserves and a rise in prices will induce oil producers to increase its production. Material provided by InstaForex – Source – InstaForex

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