Brent: Oil Prices Go Down
Qatar’s Minister of oil Mohammed bin Saleh al Sada said that 12 countries confirmed their participation in the upcoming meeting, devoted to freezing of oil production. The meeting will be held on 17 April in Doha. Saudi crown prince Mohammed bin Salman said in the interview with Bloomberg last Friday that his country would freeze or reduce production of oil only if the other large oil producing countries including Iran would sign this agreement. Taking into account that Iran is not planning to reduce or freeze oil production until the country reaches the level of 4 million barrels per day. Chances that Saudi Arabia, Russia and other countries reach agreement are low.
The statement made by Qatar’s Minister of oil Mohammed bin Saleh al Sada means that a meeting in Doha may be postponed or agreement will not be reached.
As a result last Friday spot price of crude oil Brent fell by 1.5 USD per barrel. On Monday the price of oil continues to decline. At the opening of European session the price approached the level of 38.30 felling by 7% from the level of 22 March, which was the highest closing level in the past four months.
Futures of oil quotes fell by over 11%. According to the data presented by the Commodity Futures Trading Commission last Friday, investors started to open short positions and reduce long positions for the first time since beginning of February. US oil reserves rose to the highs since 1930 above the level of 500 million barrels of crude oil. World oil reserves are close to the record high.
Even if the agreement to freeze oil production is reached it is unlikely to result in the decrease of oversupply.
Therefore, we can say that the decline of oil will continue.
The material has been provided by LiteForex - Finance Services Company - www.liteforex.com
