Technical analysis and trading recommendations https://fxpcm.com/en/fx/brent-crude-oil-inventories-us-last-week-rose-04082016
Since early June, oil prices have fallen by more than 20% when the price of Brent crude oil was close to the level of 50.30 dollars per barrel.
However, US oil inventories remain at record high levels for the summer holiday season. Excess inventory levels compared with the average value of the same date of the last 5 years is over 30%. In the United States, the size of oil reserves is located on the highs of the last 80 years, exceeding 500 million barrels.
In the oil market are growing concerns that oil prices may reach a level of $ 35 per barrel due to Libya's readiness to return to the oil market and the likely growth of oil production in OPEC member countries. Many factories in the US and Asia are willing to suspend their activities in connection with the period of seasonal maintenance. The slowdown in refining leads to a further increase in its reserves.
Increase in the number of drilling rigs operating in the US also helps to increase the pressure on oil prices. According to the latest report of the oilfield services company Baker Hughes, the number of active rigs in the US increased to 374 units, and a positive trend has been observed for eight of the last nine weeks. Most likely, the dynamics of growth in the number of drilling rigs will continue, as the number of drilling rigs in the United States nearly 77% below the record level that was recorded in October 2014.
Wednesday's US Energy Department data showed that crude oil inventories rose last week by 1.4 million barrels. However, oil futures rose after this message because gasoline inventories last week fell by 3.3 million barrels. The news came as a surprise to traders. Surplus stocks of gasoline in the recent weeks, oil prices contributed to the fall, so the dynamics of stocks of gasoline as much impact on oil prices quotes lately.
Earlier this week, prices fell below $ 40 a barrel for the first time in the last three months. The October Brent crude on London's ICE Futures exchange dropped to 41.80 dollars per barrel. A minimum of a week in the spot price of the Brent oil was recorded near the mark of 41.50 dollars per barrel.
The president of the Federal Reserve Bank of Atlanta Dennis Lockhart said on Monday he did not exclude raising interest rates at the next Fed meeting, which will take place in September. This will increase the investment attractiveness of the US dollar.
Thus, it is likely that oil prices will continue to fall against the backdrop of the fundamental factors.