Yesterday, oil prices continued to decline. Early morning futures for Brent crude fell by 28 cents to 82.06 dollars per barrel, and futures for WTI - by 34 cents to 77.06. Earlier, when in the US was still Monday, Brent crude oil price fell to four-year low. Since the end of June, world oil prices have fallen by 30%.
Futures price has gone down in the evening of the same day under the influence of statements of Kuwaiti Oil Minister that he does not expect a decision to reduce production by OPEC.
"I do not think that any reduction in production will happen. We believe that prices will stabilize once the market absorbs the excess supply of oil," he said, speaking at a conference in the United Arab Emirates on Monday.
OPEC countries are meeting on November 27. Their collective production quotas are now 30 million barrels per day. Analysts have no consensus on what decision OPEC will make regarding production volumes. Exchanges in London and New York immediately responded to the news with downtrend.
The pressure on the price of oil has also continued by the growth in the US dollar. Oil is traded almost exclusively in dollars, so the rise in the US currency makes it less affordable for buyers who use other currencies.
Moreover, recently it was reported that Libya next week is going to restore supplies to the largest oil fields. In October, the country reduced oil production to 500 thousand barrels per day, as one of the factions, fighting for power, seized a large oil deposit of El Shararah. In September, oil production in the country reached 900 thousand barrels per day compared to 100 thousand in June.
Earlier, information on reducing the level of unemployment in the United States also impacted to the decline in oil prices.
According to released last Thursday OPEC forecasts, in 2017 the demand for its crude oil could drop to 28.2 million barrels - a minimum of 14 years. The organization has worsened prognosis in demand for all subsequent years up to 2035, except for 2015.
On the other hand, in a report published by analysts of the US financial conglomerate Goldman Sachs last week was noted that OPEC is losing its influence on the oil market due to increased competition after the shale gas revolution in the US.
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USDCHF – November 11th 2014