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Oil fell below $ 56 under pressure from dollar growth

As a result of trading on Wednesday, oil fell moderately as part of a local correction from fresh almost one-year highs reached around $ 57.40 per barrel. After failing to test the $ 55.80 zone, Brent finished just below the $ 56 level. A slight pullback looked fitting given the technical overbought coupled with renewed dollar gains and a lackluster US Energy report. According to the ministry, last week crude oil inventories in the United States fell by 3.2 million barrels, while the forecast assumed a drop in volumes by 3.8 million. The result looks even more losing against the background of the API estimate, which reflected a decrease in reserves by 5.8 million barrels. Moreover, stocks of gasoline and distillates increased by 4.4 million and 4.8 million barrels, respectively, which also added negative. Otherwise, the situation in the commodity segment remains the same – prices refrain from significant correction, smoothly moving to new highs and aiming at the level 60 dollars. At this stage, the realization of this goal is hindered by the dollar’s attempts to reverse the multi-month downtrend, but the recovery momentum looks too uneven and modest to talk about such a radical change in the vector of movement of the world reserve currency. However, if a more confident offensive of dollar buyers begins to be traced on the market, this factor may affect oil more tangibly .___________________ Arseniy Dadashev, Director, Academy of Finance and Investment Management

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