The price of oil will continue to decline on the week due to geopolitical risks

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Stock Markets Group – last week for the oil market ended with no significant changes and even more negative sentiment. The geopolitical situation in the world has eased investors ‘ interest to the course of oil and switched their attention to the commodity markets for a safer assets such as precious metals.
Over the past seven days, oil prices failed to find support neither the buyers nor the macroeconomic data, which came out this week.
So the expected energy conference CERAWEEK, which was held in Houston, and on which market participants had high hopes, did not bring a new agreement between OPEC and the miners of shale oil in the United States. According to its results there were no significant statements, which market participants were disappointed.
As a result, the new York stock exchange, the price of oil WTI fell to $60.20, while Brent fell to around $64 per barrel.
However, the beginning of trade wars between the US and Europe has made significant adjustments not only to the market of industrial metals, but in the price of oil on world markets.
Large consumers of raw materials expect that such changes of consumption can have a negative impact not only on world demand for “black gold”, but also on production.
As you know the last time OPEC was divided participants into those who consider continuation of the agreement is strategically important condition for the containment of falling oil price, and those who believe further regulation is useless cost of raw materials.
This has shaken the confidence of investors that the program participants in the cartel can succeed. As a result, the majority of participants of the oil market recorded its trading positions at the beginning of last week.
The reduction of import of oil to China by more than 20% on an annual basis, according to the GAC, also a bad signal for investors. The first largest country in the world in consumption of raw materials, including oil, loses interest in imports and invests heavily in renewable energy.
In the future, according to experts, this will lead to a further drop in oil prices and growth of reserves of “black gold” in the world.
Next week, the price of oil will remain under pressure amid geopolitical uncertainty. Actions trump in the US, the crisis in relations between Britain and Russia, this will reduce the interest in such investment instruments as the oil and increase the demand for defensive assets.
According to our forecasts until the moment to reduce the political tensions, the Brent oil will remain in the corridor of $64 – $65.5 per barrel.
Igor Gross,
Analyst of commodity markets,
Stock Markets Group™