The oil “slippery slope”
Brent previously showed an increased intraday volatility. Emotional market participants at the time sent the barrel to an almost one-month lows in the area of 73,80, where the closing price has recovered to 75 minimizing losses.
The reason for the outburst was reported that the U.S. secretly appealed to OPEC to increase production by 1 million barrels a day due to the prohibitive price of gasoline. Without thinking, the players, hearing the combination of “increase production”, rushed to sell off Brent, but once the emotions subsided, quotations recovered, although it remained in negative territory at the end of the trading day.
The markets are reminded of the potential threat from the upcoming summit in Vienna, where exporters can do to increase production and thereby slow down the process of restoring balance in the market.
Meanwhile, statistics from the United States was not pleased. Crude oil inventories fell by 2 million barrels against forecasts for a drop of 1.8 million, but the gasoline stocks unexpectedly jumped by 3.8 million barrels against the forecast growth at a modest 590 thousand
The report did not add optimism in the market, but Brent bought on the drawdown, and in the morning the dollar index continues to recover, exceeding the region 75,50. Today the energy Ministry will publish an official report on reserves and production, which can also spoil the mood of the players. The closest significant support for Brent is around 75.
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