Currently, Brent oil futures for October delivery in the first time exceeded $50/barrel, the highest level since Brexit in June.
EconomyVN - Data of US gasoline reserves reduced, this has the positive impact, helping oil prices gained strongly on the market, including Brent oil prices for October delivery in the first time exceeded $50USD/barrel, the highest level since Brexit in June.
On the Asian market, Brent prices fell slightly but remained at $50.8/barrel. WTI light sweet crude oil prices also rose by 0.27%. Oil prices will likely keep upward trend, following news that the Petroleum Exporting Countries prepare to agree on output restrictions.
Rising oil prices also helped the Asian major indexes such as Japan's Nikkei 225, Hang Seng of Hong Kong (China) and South Korea's Kospi rose early today (August 19th), but did not last later.
On Thursday, crude prices kept going down during early Asia trade, being weighed down by the ongoing growth in American oil stocks as well as the record-peak output by Saudi Arabia.
The combination of the two factors indicate that, notwithstanding the multiple supply disruptions as well as the steady dip observed in American production for recent months, the world’s still oversupplied.
In New York, September delivery light, sweet crude futures were worth $41.50 per barrel, down 0.5%. Meanwhile, October delivery Brent crude futures sagged 0.5%, trading at $43.83 per barrel.
Crude prices descended overnight after the Energy Information Administration data disclosed a 1.06 million-barrel growth in American crude inventories by August 5, thus pushing total stocks to 523.6 million barrels and also 37.7% above the five-year average for the same time of 2015.
The build actually reflects the soaring glut of refined products in the American market, that has led to lower margin and also reduced demand for oil.
Gold goes down in Asia
Gold tumbled during Asia trade as market participants booked profits and kept an eye open on the greenback’s weakness.
In New York, December delivery gold futures eased 0.06%, trading at $1,351.05 per troy ounce. September delivery silver futures ascended 0.15%, hitting $20.200 per troy ounce, while September delivery copper futures soared 0.23%, trading at $2.178 a pound.
Overnight, gold grew on Wednesday, as the greenback sagged steeply against a basket of its key counterparts, thus helping to provide a slight support to the most popular yellow metal in quiet, range-bound trade.
Market participants keep closely monitoring American employment data for a gauge on the strength of the labor market, following last Friday's upbeat jobs data for July. Additionally, on Wednesday, the US Department of Labor informed that in June, job openings soared by about 2% to 5.624 million from a relatively soft revised annualized rate of 5.514 million last month. Financial experts expected to see moderate surges on the month to 5.588 million.
EconomyVN - On August 8th, OPEC announced that they have convened an informal meeting of the Member States in September in Algeria to find ways to stabilize the oil market.
The meeting convened by Organization of Petroleum Exporting Countries (OPEC) will take place on the sidelines of the International Energy Forum in Algeria on 26 - 28th of September.
OPEC emphasizes they will continue to closely monitor market developments and are always cautious in discussing with all Member States on ways and measures to restore stability and the number of orders in the oil market.
Al-Sada - OPEC President reaffirmed the organization's view that oil demand in the world will increase in the third and fourth quarters of this year. Mr. Al-Sada stressed to need to invest more in oil production to meet rising demand and offset declining output at oil wells.
Shortly after OPEC meeting was announced, world oil prices have rebounded on 8th of August. Brent oil price has increased by 66 cents in October compared with the end of the trading day on Friday last week, up to $ 44.94/barrel. Light sweet crude for September delivery rose 53 cents, to $ 42.33 USD/barrel.
Bazooka - On Friday, crude oil futures rose during Asia trade, though gains were pared following huge falls in the previous trading session as market participants reassessed American data underlining oversupply in petroleum, while Iraqi oil exports keep soaring.
US West Texas Intermediate crude futures gained 6 cents, being worth $44.81 per barrel. The contract descended 2.2% yesterday.
Brent crude futures acquired 14 cents, trading at $46.34 per barrel. On Thursday, the global benchmark closed 2.1% lower. The given benchmark has found itself on track for sag of almost 3% this week.
The global crude oversupply in has been easing, though with huge amounts of oil being held in tanks as well as tankers on land and water, the rebalancing might take longer than many expected.
There’s so much crude in storage, so it will take months to feel the erosion of the overhang, as many energy analysts state.
Iraq's crude exports are set to soar in July, according to loading data as well as an industry source, thus putting supply growth from OPEC's second-largest producer back on track after two tumbling months.
In Tuesday's trading session, oil prices fell for the second consecutive session by US dollar rose despite new figures showed that oil stockpiles fell slightly, according to Reuters updated.
American Petroleum Institute (API) published US crude stocks fell 2.3 million barrels last week, higher than a decline of 2.1 million barrels as a forecast of experts. Today, the US Energy Information Administration (EIA) will provide data on the official oil reserves. Earlier, US gasoline supplies fell for 8 consecutive weeks.
Typically, such information will help the oil price increase, but yesterday, the market's attention again focused on fuel supplies in the US have risen too high in the summer.
In recent weeks, when storage places have run out of fuel on the bank, the US energy companies stored excess products in ships near the coast. Many analysts point out, even if crude stocks fall, increased fuel output still makes the market very nervous.
On the London market, Brent delivery August fell 30 cents or 0.6% to $46.66/barrel. In New York, light sweet crude WTI fell 59 cents or1.3% to $44.65/barrel, WTI oil price in the previous trading day lost 1.6%.
The difference between the Brent price and WTI oil price was the highest level since late April 2016.
Yesterday, US dollar suddenly rose to the 4-month high against many major currencies of the world, increasing Dollar generally has a negative impact on oil prices.
In Libya, a pretty big strike of workers in energy sector erupted in the port area to the east of Libya, according to initial estimates, the strike caused the Libyan oil exports falling 100 thousand barrels/day.
The published new data showed that India, a country consumes a lot of energy products, had strong oil imports in June so that Iraq and Saudi Arabia exported more oil. June exports of these two countries are much higher than in 2 previous months . Currently, Iraq is providing more than 20% of oil imported into India.
Many experts predict in the near future India will continue to buy more energy products because the government is aiming to build three storage places of energy products. India's import will increase an estimated 91 million barrels of oil from now until 2020.
According to Barclays Bank, the large production of crude oil in storage will likely bring big trouble for the world oil market in the coming time.
Crude oil prices had fallen to the lowest level in two months on July 7th after the energy information agency (EIA) said the storage of crude oil fell less than expected. An energy market observer supposes that this is a potential hazard.
In an interview with CNBC, chief analyst of Barclays Michael Cohen said the supply and demand of crude oil in 6 quarters are unbalanced. According to him, Barclays predicted that oil prices will fall within 6-8 months because reserves of oil may continue rising amid the recession.
In the summer months, the increased travel demand typically leads to rising oil demand and oil prices also will increase during this period. But once summer ends, oil inventory could continue to rise.
Looking at the chart above, between the expected supply and a source of reality, we can see an incredible difference. Data in this chart has been compiled from 38 countries belonging to the Organization for Economic Co-operation and Development (OECD).
In financial crisis in 2008, the crude oil reserves reached 138 million barrels. Today, this number has increased more than 2 times to 383 million barrels. Mr. Cohen said this figure was from only the countries of OECD organization.
By several reasons, analysts believe that the recovery of the oil price in recent times will stop and the price of oil will decline from now until the end of the year. Oil price had earlier caught the bottom in mid-February and then again near 100% to $50 a barrel.
Oil price in one year
Bank of America-Merrill Lynch is the only person who predicts oil price could surpass level $50 per barrel by the end of this year. Capital Economics predicts oil price will end up below $50 a barrel in the year 2016. Oil price is currently traded around $47 per barrel.
Another point made Barclays hardly be optimistic on global growth, which is the problem of excess production in China.
With all of these, Mr. Cohen said that oil price will continue to decline in the third quarter of 2016 and then recovery in the fourth quarter and increase sharply in 2017.
According to Cohen, the problem of supply-demand at present are not yet paying attention and the American shale oil producers will maintain output instead of the cut production like before. But once the market realizes this fact, we will need to decrease the production of shale oil, help promote rising oil prices.
In the Thursday session, oil prices recovered strongly as the dollar discount and less pessimistic psychology of investors on the market, according to the Wall Street Journal reported.
On New York market, the price of light sweet crude oil August delivery rose 93 cents to or 2.1% to 45.68 dollars per barrel.
On London market, the price of Brent oil rose 1.11 USD or 2.4% to the level of 47.37 per barrel. In previous session, oil prices declined sharply down, the lowest level in two months.
Since the British electorates voted to leave the European Union (EU) in late June 2016, oil price fluctuations follow the happenings of US dollar. Brexit makes investors worried about the global economic outlook, so the impact of supply and demand factors for oil is less than before.
Investors on the energy market and the stock market always try to assess whether investors are "fleeing" to the safe property.
In the yesterday session, USD index decreased 0.3%. Thus, prices of commodities increase. S&P GSCI tracking the movements of 24 types of goods increased 0.7%.
The psychology of investors on the energy market in the recent weeks is not optimistic by residual energy supply continues to increase, according to the Chairman of Ritterbusch & Associates Foundation, Mr. Jim Ritterbusch.
At the same time, there are also signs that demand for energy consumption rises more slowly, G7 reserves increased. Data from China showed the oil reserve in June 2016 of the country dropped down to the lowest level in five months.
However, still more positive factors support oil prices, according to experts in the Royal Bank of Canada (RBC).They forecast the global economy will grow 3.2% from now to 2018, energy consumption will remain high, predict that energy consumption of Canada increased 1.4 million barrels of oil per day from the level of 1.1 million barrels of oil per day as calculated previously.
RBC raise oil price forecasts on the US market up $45 per barrel this year from $41/barrel as calculated previously. Brent oil prices, also predicts this year's average is $47 per barrel, up more than $4 per barrel compared with previously updated research reports.
RBC said that world oil markets will establishe equilibrium in the second half of the year 2016 when the interrupt source elements as forest fires in Canada and riots in Nigeria are resolved. Oil demand will increase over time, excess reserves will be addressed.
In Wednesday's trading session, oil prices rose along with stock market, many commodities and other currencies, according to the Wall Street Journal.
On New York market, light sweet crude WTI futures in August, 2016 rose 83 cents or 1.8% to $47.43/barrel. On London market in the same period Brent prices rose 84 cents or 1.8% to $48.80/barrel.
According to WSJ's analysis, since British vote for leaving the European Union (EU), the oil price usually fell amid investors sold strongly stocks and commodities to buy these assets considered as safe such as gold, US dollar.
However, when this trend has changed, oil prices rose along with the stock market and other commodity prices, this happened during Wednesday session.
The stock market rose because new signs showed that the US economy is growing well. Institute for Supply Management (ISM) announced index of non-manufacturing sector in June, 2016 increased to the highest level since November, 2015. S&P 500 rallied immediately after that news.
During yesterday's session, dollar and gold rose, but gains has slowed as trading time gradually ended. Chairman of Excel Futures fund, Mark Waggoner said in Wednesday he did not receive more orders to buy gold but they get a lot of orders to buy other goods, which suggests that investors' demand for gold temporarily cooled.
"According to my forecast, the impact of Brexit coming to an end, the market will pay more attention to other factors in near future," said Mark Waggoner.
Market sentiment is also more stable, British pound after falling to 31 year low has increased slightly, US dollar depreciated. USD index fell 0.2% on Wednesday.
Bank of England (BoA) announced officially to decrease the compulsory reserve rate to encourage banks to extend credit for UK businesses.
Experts forecast US crude stocks fell 2.3 million barrels last week, though still down but this rate is lower than the decline of 3.4 million barrels in the same period last year.
According to the US Energy Information Administration (EIA), compared with the same period, average of oil production in the US fell from April until now. The average reduction is 800 thousand barrels/day. This is considered as a possible factor supporting oil prices.
According to Mr. Fadel Gheit, senior analyst at Oppenheimer & Co funds, one other supporting factor is that level of 40-50 USD/barrel is not enough to encourage energy companies to boost production again, this possibility can only occur when oil prices stabilized above $50/barrel. Therefore, oil prices would have to rise above $ 50/barrel, then could decline as companies take advantage of expanding production.