Oil: Verbal intervention by Saudi Minister did not help prices
Crude oil prices moderately declined on Monday, and today’s early trading, pressure on Brent has only intensified. The barrel is in no hurry to move away from the desired mark of 80, clinging to the 79 level, the loss of which will open the way towards the next psychological support 78.
The oil market is pointedly ignored yesterday’s verbal intervention by Saudi Minister al-falikha that made the prices rise to 100 dollars per barrel in case of exceeding of the daily deficit of 3 million barrels. Partly the players don’t believe in the paucity of spare capacity, the largest exporter, partly hesitant on the active action ahead of the start today of the economic forum in Saudi Arabia.
Concerns related to the conflict between the United States and the Kingdom of the journalist’s death, gradually weakened. Traders have less to fear strict measures from the Americans that in case of sanctions will suffer in the context of the labour market that they do not need on the eve of the midterm elections in Congress.
The market drew attention to signals about the intention of Saudi Arabia and Russia to increase production of hydrocarbons in connection with the introduction of sanctions against Iran. All this, coupled with a stronger dollar and prospects of increasing shale production now prevents the growth of prices and keeps the buyers in control. In the short term downside bias, likely to persist, but it is possible bursts of volatility as news from the fields of Saudi summit.
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