Tuesday , September 22 2020
Home / economy / Why the price of oil reached only $ 50 per barrel

Why the price of oil reached only $ 50 per barrel

Почему цены на нефть достигнут только 50 долларов за баррель

The price of oil in Brent finally reached $ 45 per barrel. Many experts believe that oil will go up further, reaching the psychologically important level of 50 dollars per barrel. However, further growth is questionable.

The beginning of August brought some positive news for the oil market. So, the oil reserves in the U.S. last week fell by 7.4 million barrels. That’s twice what analysts expected. And the index of business activity in industrial sector of China in July rose to its high for the last 9.5 years.

The oil market is “two months hovered at the same level, unable to break through $ 45 per barrel.” Investors were afraid of production growth due to easing of OPEC+ with the onset of August. “However, published statistics showed that inventory growth did not happen, risks have been mitigated,” he explains.

Against this background, the record amount of monetary stimulus from global Central Banks finally went on the oil market, analysts say. “Printed money have somewhere to go, the new cash is already overheated in the price of gold and other metals,” says Kalachev.

“July consistently shows the recovery of the industry. This was the principle reason for the rise in prices of all raw materials, not just oil. In addition, investors in anticipation of devaluation of the dollar believe that consumers will increase purchases of raw materials,” adds group Director of corporate ratings ACRA Basil Tanurkov.

“The market thanks to a deal OPEC+ and the recovery of demand moved to the state deficit, as evidenced by the decrease in inventory in the United States. This drives the price up” – agrees Director of the group on natural resources and commodities, Fitch Dmitry marinchenko.

The market, in his opinion, comes from the fact that demand for oil will continue to recover, the economy will open. A re-introduction of quarantine measures in some countries will be in the nature of exceptions.

How to change the price of oil due to all these factors

These factors will allow the oil to move in the range of 45-50 dollars per barrel in the coming months, solidarity interlocutors TASS. “If the demand for oil in the world continues to recover dialed a pace that “liquidity in the market enough to lift the price,” – said Kalachev. Tanurkov considers “almost inevitable” rise in oil prices by the beginning of 2021, as the balance of the market shifts to deficit.

Marinchenko also believes that a price range of 45-50 dollars per barrel are realistic for this year and next. But above this range, oil will rise is difficult because of the still large volume of commodity stocks of oil.

© 2020, paradox. All rights reserved.

Check Also

LA Mayor Garcetti crowned Covid-19 ‘dictator’ after shutting off utilities at TikTok star’s Hollywood party mansion

In a tweet, Garcetti announced that he had instructed the city to disconnect utility services …

Leave a Reply

Your email address will not be published. Required fields are marked *