The oil price has recovered to $61 after massive sell-off on Friday
On Friday, oil prices recovered slightly after a massive sell-off a day earlier and is under slight pressure in early trading on Monday. Touching low of $ 60 per barrel, Brent crude settled above $ 61, but given the tense situation in the segment of risky assets, the potential recovery of the quotes seemed to be limited, but downside risks remain.
Escalation of a trade war between the U.S. and China affect the dynamics of all asset classes and the market of black gold is no exception. And given that the tariff of trump Beijing responded with a devaluation of the yuan, and now investors will lay in the price of a further aggravation of relations between the two countries and reducing the likelihood of the transaction.
So now with this front positive can be expected, at least at this stage.
Holding back the falling prices, a weaker dollar, tensions in the middle East, as well as the decline of oil reserves and drilling activity in the United States. According to baker Hughes, last week the number of active drilling rigs in the country dropped by a further six units of up to 770 units. Meanwhile, there were reports that Iran has arrested another foreign tanker in the Persian Gulf that threatens to exacerbate the situation in the geopolitical arena.
However, this is not enough to bring Brent to increase, given that the focus of investors is the trade confrontation between Washington and Beijing. In these conditions it is possible falling of the prices under the marker 61, while the level 60 remains under threat.
Academy of management Finance and investment