Yesterday, oil price ended the session lower at $60.20/barrel.
Today, the price of WTI oil rose, the dollar fell sharply in Europe, when a series of economic indicators in Europe were announced with positive figures. Currently oil is traded at $ 60.74/barrel at 6:30 pm GMT +7.
Oil price is likely to decrease because of the following reasons:
- Concerns over supply from OPEC: OPEC is likely to maintain output at 30 million barrels per day (bpd).
- Oil supply from Russia: According to Bloomberg, Russia’s oil output is at near record high level in May 5. Russia’s crude oil exports in May reached 5.06 million bpd, 1.95% higher on annual terms. Production from the company such as SeverEnergia – a joint venture between OAO company OAO Gazprom Neft and Novatek surged. According to Mr. James Henderson – specialist in Russian oil and gas industry at Oxford Energy Institute said production in Russia remained stable throughout the period of falling prices, and they will not encounter problems in maintaining volume growth in the next 1-2 years.
- Production in the US: Many US companies drilling is waiting for chance to come back as price starts to improve. This also will dampen oil price outlook.
However, oil price may go up because of the following reasons:
- Increasing demand: Demand from refineries is growing, especially in countries like the US, Saudi Arabia and China. According to JPMorgan, the demand for crude oil from the refinery will increase sharply in the second half of 2015. Moreover, Saudi Oil Minister Al Naimi said the demand in the second half of this year will be better now. The demand is rising, supply is slowing.
- Damaged oil sand mine: An oil sand mine was closed due to forest fires occurred nearby
Forecasting: Oil prices may fall to $60.11/barrel.