Oil is targeting$ 62 a barrel on the crisis in Venezuela

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Brent crude on the eve held above the $ 61 a barrel and marked the highs in the area of 62,50, from where they subsequently fell back 100 points, but still closed the day higher, however, in the range of 1%. In the morning trading session on Thursday quotations maintained an upward bias, again clinging to the mark 62.
The fall of prices hinders the situation with Venezuela. Moreover, it is not so much imposed sanctions, but in the future the introduction of new restrictions, which threaten the country, if the change of power will not happen. While everyone is in favor of the increase in oil prices – the authorities are not willing to support the self-proclaimed President Guida, and hence the probability of the abolition of the monopoly of the state company PDVSA remains low.
But a report by the energy Ministry, which was slightly better than the API data is not inspired investors. Crude oil inventories increased by 900 thousand, which is three times more modest forecasts and slightly below the estimates of the petroleum Institute. Gasoline inventories, according to official figures decreased by 2.2 million compared to the forecast growth of 2.8 million Production remained at a record level of 11.9 million barrels. Judging by the reaction of the market, for the growth he needs evidence of a decline in production, which at best is stagnating.
In the framework of yesterday’s meeting the fed is expected to have softened the rhetoric and well put pressure on the dollar, which continues to digest the more dovish message of Powell. However, the monetary policy of the Central Bank and the reaction of the USD have an indirect impact on the oil quotes in the period when the ball is ruled by geopolitics – the history of Venezuela and the trade negotiations between the US and China. Waiting news from these fronts constrains price movements.
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Michael Mashchenko,
Analyst social network for investors
eToro in Russia and the CIS