Traders doubt the reliability of the bullish trend – oil cheaper

On Wednesday, oil prices fell amid concerns of the players that the rally, which was observed during almost the entire third quarter, could not get further development in the last quarter of this year. Futures for US oil West Texas Intermediate traded today at noon around $ 50.10, sagging 32 cents from yesterday’s closing price, and during the session, quotes dropped below $ 50. Futures for Brent fell 47 cents to $ 55.53 a barrel. This fall comes amid market speculation that the third-quarter rally, which sent Brent quotations at the end of September to the highest levels since mid-2015, has gone too far. News that Libya has resumed production today at its largest oil field in Sharar, also increased the pressure on “black gold.”
Before the armed rebel units blocked work on this site on Sunday, the oil production figures at the Sharar field exceeded 230,000 barrels per day. “Fundamental factors may not be strong enough to support a sustainable rally, especially when it comes to such a highly dependent asset as oil,” commented Ole Hansen, chief foreign exchange strategist at Saxo Bank in the bank’s new quarterly forecast for investors. However, traders hope that the oil market is now in the process of rebalancing, and the level of demand will no longer lag far behind the excess supply volumes.
The launch of the balance recovery processes was made possible thanks to strong consumption figures and efforts by oil producers to reduce production by 1.8 million barrels per day (OPEC + participants will continue to adhere to this commitment in the 1st quarter of 2018). However, the US, remaining outside the OPEC + deal, continued to increase production, and this did not allow prices to grow more. At the end of September, the volume of oil production in the US reached 9.55 million barrels per day, the highest since July 2017, and the country’s drilling companies, according to the Baker Hughes oil company, increased the number of active oil towers by 6 units for the week of September 29.
“The number of existing drilling rigs in the US increased last week, demonstrating that the growth of oil quotes inevitably leads to increased production of shale oil,” – commented investment analysts Rivkin Securities. On Tuesday, data from the American Petroleum Institute showed that over the past week, the increase in gasoline reserves in the country exceeded forecasts, reaching 4.9 million barrels, and oil reserves decreased by 4.1 million barrels. Now traders are waiting for today’s official statistics from the US Energy Ministry, which will shed new light on the situation on the oil market

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