On 20/3, oil prices rose 1.5%, from $54.32 to $55.14, as investors take profit and close orders April oil contract.
Oil prices today retreated 0.7% compared with the opening price at $55.14, currently trading at $54.71 (5:30 p.m. GMT+7).
According to a report from the Commodity Futures Trading Commission (CFTC) on Friday (20/3), the number of oil futures contracts from 10th to17th March decreased by 17.171 to 243.488 contracts. Number of short orders also increased to 38.985, showing rising confidence in oil prices are eased.
Saudi Arabian Oil Minister last week said it refused to “stand alone” cutting output to defend prices by itself. Mr. Mohammed Al-Madi, Saudi representative in OPEC says oil prices will rise again, but it’s hard to go back above $100-120.
Fereidun Fesharaki, chairman of leading energy information company FACTS Global Energy (FGE) said oil prices could drop to $35-40 by the end of this year.
Moreover, dialogue on lifting embargo against Iran are making positive changes. Former energy counselor for Iran, Fesharaki said that there is 80% of possibility that this agreement will be achieved prior to march 31st and oil prices could fall another $5. If sanctions are lifted, Iran’s production could add up 800,000 bpd to 3.8 million bpd in the next 3 months, causing further excess oil supplies.
Shell Oil Company, one of the largest oil companies in the world, may be allowed to drill in the American Arctic in the future. The deal awaits approval from the Secretary of the US Department of the Interior, Sally Jewell in Wednesday.
Currently there is no indication to suggest that oil prices will rebound. Forecast: oil prices can go down to $53.13.