Yesterday oil prices turned down slightly after 2 days of rebounce, when the dollar received support from positive US QII GDP and Fed’s upbeat statement.
According to figures released yesterday, economic growth of the US recovered from -0.2% to 2.3%.
WTI price fell 0.8% to $48.40.
Today WTI continues to decline, currently trading at $47.85 at 2:13 pm GMT+7, down 1.2% compared with the opening price ($48.44).
In the meeting with Russian Energy Minister Alexander Novak on July 30th, OPEC’s General Secretary Abdullah El Badri said that OPEC has no intention to cut production and the market is subjected to political factors. Mr. Novak shared the same notion with OPEC and said $50-60 was predicted in advance.
According to a Reuters monthly survey, experts predict oil prices will recover at the end of the year thank to the strong demand, however, the increase will be limited by the strength of the dollar and unfavored supply side.
The analysts said that the weekly output data of the EIA cannot build the whole picture about evergy sector, while the monthly and weekly numbers differ. This explains for the recovery earlier this year and latter plunge in recent weeks. Practically, US production is not showing any significant signs of reduction data collection procedure is incomplete and difficult.
Investors are very cautious with such mixed data and said that the most reliable figure (in short term) is oil inventories cause companies have to report fully on their reserve capacity . Tonight market is await May EIA report, showing where US oil production has gone.
Gasoline and diesel August contracts will mature today, so there may be some volatility in the crude oil market.
Forecast: After 2 days of temporary rebounce, WTI tends to return to the low area of $47.00. It’s likely that WTI may hit around $46.90.