Oil quotes began to grow again. Brent crude is successfully making its way above $72.2/b, which it could not overcome at the beginning of the week. At the moment, bulls are trying to get higher, and it seems they will succeed in it. In case of getting over the Fibo-level of $72.7, buyers should not meet strong resistance up to $74.
It was not the first time when the oil price went up by $1 (in this case from $71.15 to $72.15) during the announcement of the EIA data on crude oil inventories. Stocks rose by 5.4 million barrels over a week, while analysts expected them to fall by 0.80 million barrels. At the same time, according to the Energy Information Administration, US gasoline inventories declined by 1.12 million barrels over the past week, while the market had expected 300 thousand barrels reduction.
However, the main reason for growth is the tension in the Middle East. On Tuesday, Saudi Arabian authorities reported a drone attack on the east-west crude pipeline.
On Wednesday, US embassy officials in Baghdad were evacuated due to alleged threats from Iran. The United States believes that the country was involved in attacks on four oil tankers in the Persian Gulf, which occurred on weekends.
This raises market concerns about possible interruptions in supply from the region, thus locally pushing the quotes up and increasing volatility. However, the situation is more uncertain in the long run. Earlier on Wednesday, the IEA lowered its estimate for the growth in world oil demand in 2019 by 90 thousand barrels per day - to 1.3 million bpd. Total world supply fell by 300 thousand bpd compared with the previous month, to 99.3 million bpd. The question remains: how will OPEC and its allies react and will they extend the agreement to reduce oil production by another half a year? This decisions will form the medium and long-term prospects of the oil price movement.