Analysts explained why the black gold started to rise in price
Oil prices, which have moved to growth, 6 may have increased the rise. Thus, the price of Brent has climbed above 31 dollars per barrel for the first time since April 13. According to analysts, the growth is on the decline in oil production. Another positive factor is the weakening in a number of countries imposed because of the pandemic coronavirus quarantine.
The cost of July futures for Brent crude on the London ICE Futures exchange to 13:01 Moscow time has risen to 1.87 dollar (10.7 per cent) to 31.55 percent. And the June contracts for WTI in the course of trading on the new York Mercantile exchange has risen by this time to 25.39 per barrel, which is $ 0.83 (3,38%) above the price of closing of previous session.
Bloomberg analysts note that several us producers of shale oil – Diamondback Energy Parsley Energy and Centennial Resource Development, announced the forced production cuts due to the sharp fall in oil prices.
“Now we are seeing a growing rate of decline of oil production outside OPEC+. Despite the fact that the excess supply on the market remains, we are confident that the situation pretty quickly things can change,” said DNB analyst Helge Andre Martinsen.
We will remind, on may 1, entered into force on transaction OPEC+ to reduce oil production. The agreement provides for the reduction of oil production to 9.7 million barrels per day from October 2018, with the exception of Russia and Saudi Arabia – for them, the figure is 11 million b/d.
“Planned reduction of production will be a record, however, experts do not forget about the huge glut of oil on the world market, limiting the price rise” – says the analyst of Price Futures Group Phil Flynn.
As you know, the world is running out of capacity to store oil. Off the coast of the US has already gathered dozens of tankers – they have nowhere to ship raw materials:
Oil tankers off the coast of California