Oil: OPEC to the rescue
Brent crude has dramatically accelerated recovery in the second half of the day and reached levels near $ 78. Earlier during the trading session the quotations were testing the mark 75. Decent rise was due to several factors, chief of which was the signal from OPEC.
The cartel decided to support the market to stop falling prices, saying that the Pact OPEC+ remains in force, and exporters will continue cooperation until the end of 2018 and in the future. Also the representative of the organization said that any changes to the terms will be gradual, and the decision about the timing and volumes of production increase has not yet been made.
Encouraged by these statements, the market ignored the remark about how, if necessary, the production levels will be adjusted. In other words, the issue with the weakening of quotas remains on the agenda, just information at this time, sounded much softer and more careful than the recent signals from Russia and Saudi Arabia, which raised a wave of mass closure of long positions.
However, the rebound of quotations fueled by other factors. A widespread weakening of the dollar, as well as the API data, reflecting the destocking of crude oil and gasoline on 1 million and 1.5 million barrels respectively. Today’s official report of the energy Ministry, will confirm if these figures will be better able to provide some support for prices but the impact will be limited since the focus of the market is now focused on OPEC.
From a technical perspective, Brent will need a firm break out of the level 78 to return to the game is $ 80. Testing this area in the short term we do not exclude, but such growth momentum, as yesterday, we are unlikely to see in the short term. Especially before the weekend can work the effect of the pull of players to fix profit.
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