The price of oil will soar in case of escalation of the conflict in the Persian Gulf

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After a failed attempt to break above the monthly highs the prices of both reference varieties of crude oil (Brent and WTI) corrected approximately in the middle of the current from the end of April ranges. North sea Brent is trading around $70.90 per barrel., American light WTI near $ 62.55 per barrel. Instability in the middle East, amid rising inventories in the United States, which was announced on the eve API, led to high volatility in the oil market.
Today at 17:30 GMT will be published the official report of the U.S. Department of energy. According to the consensus forecast of the expected reduction in stockpiles by 2.5 million barrels. The forecast API is also meant the reduction of resources, but did not materialize. There is reason to believe that the official figures indicate the growth rate, which will serve as another factor of pressure on oil prices. In this case, lower prices perhaps to $69.5 for Brent and $ 61.20 for WTI.
However, any escalation of the conflict in the Persian Gulf will lead to the opposite reaction and go back to the monthly highs. Medium-term prospects for oil remain strong amid emerging supply shortage in the world market because of reduced production from Iran, Venezuela, Libya and supply disruptions from Russia.
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Alexander Egorov,
Deputy Director for science of the Department of education,
Institute of Trading and Investment “Phoenix”