Sunday , January 29 2023

The oil price has fallen again and reached the minimum value since July 2017


After yesterday's breakdown, international oil prices are still falling freely, under the influence of an increase in federal reserve rates, which increases the fear caused by excessive supply due to projections of weaker demand.

Oil VTI traded at $ 45.88 a barrel in New York, a drop of 2.08% from yesterday's closing and a new level since July 2017.

The European benchmark Brent, meanwhile, crashed to 5.05% to $ 54.35 per barrel. That's the lowest level since September last year.

"Recovery on Wednesday was short-lived," said Xi Jiarui, a JLC analyst for Reuters.

"The investor's concern was to deteriorate the base of oil markets, record production levels and distrust the OPEC commitment to reduce production," he added.

OPEC and other federal producers have agreed this month to reduce pumping by 1.2 million barrels of oil per day to support prices. However, the cuts do not start until January, before production near record levels in the United States, Russia and Saudi Arabia.

The crude was heading for the worst quarterly decline in four years, despite an agreement between OPEC and its allies to cut 1.2 million barrels a day from January, Bloomberg said.

While Saudi Arabia's Energy Minister Kalid Al-Falih said he was certain that the agreement would be extended in April, and the security that came before the entry into force of the pact only underlines the anxiety that prevails in the country. In the meantime, global investors worry that the Fed has not finished raising rates.

"Some of the elements in oil history have collapsed," said Giovanni Staunov, an analyst at UBS Group in Zurich.

"Production in the US is higher than expected, concern over spare capacity has not been achieved, and OPEC + reductions do not start until January. Correction in the actions caused by the Federal Reserve did not help either," he said.

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