The price of oil falls from trade wars and threats of the growth of shale production

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A barrel of Brent continues to rush in range, not daring to break in any of the directions. On Wednesday, the quotes once again are unable to gain a foothold above the level 65, but at the same time received support in the area of 64, being under the influence of opposing factors.
From the larger drawdowns, the asset holds a weak dollar and OPEC actions that continue to contribute to the tightening of the global oil market, which moves to the balance. But it is clear higher prices prevents the General trend of evasion of investors from the risk because of the threat of a trade war in General and the aggressive actions of the trump in particular.
The main factor, not allowing Brent to raise the head, is the activity of shale producers in the USA. On the eve of the energy Ministry reported about growth of stocks of crude oil from 5 million barrels per day. At the same time stocks of gasoline and distillates have fallen by 6.2 million and 4.3 million, respectively. As regards production, it was not without regular growth, albeit modest at 0.1% week/week and 14.0% yoy to a new record 10,381 million barrels a day.
So bright and at the same time, ambiguous figures led the market into confusion, but ultimately the asset is still left in the symbolic “plus” and in the course of morning trading has continued to reach out to around 65. Until then, until we see a confident breakout of this level, the dynamics of Brent will remain fragile and indistinct.
However, this would require the retreat of fears about shale, weakening of dollar and improvement in interest in risk, ideally peppered with internal supportive factor. The prerequisites for such a scenario is not observed, and therefore, at least until the end of the week the quotes will continue to rush in range, although the risk of a bearish move higher than the upside potential.
Michael Mashchenko,
Analyst social network for investors
eToro in Russia and the CIS