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    Brent: the rise in price is just part of the correction on 08.03.2016

    Since the third decade when the price of oil closely had approached 13-year lows at the level of 27 USD per barrel, crude oil Brent grew by almost 50%.

    Oil prices have been steadily rising in the past few weeks after the agreement reached last month between Russia, Saudi Arabia, Venezuela and Qatar to freeze oil production at the January level.

    Market participants are sure that this agreement will become a milestone in the process of reduction of oil production in the world. Amid expectations of reduction of oil production in the world and agreement between the large oil producers, the price of oil has been sharply growing since the beginning of this week.

    On Monday Minister of Energy of the United Arabic Emirates said that current price of oil forced oil producers to freeze oil production.

    Next meeting between OPEC and oil producing countries can take place either this or next month. However, oil price has strongly adjusted lately, which decreases probability of reaching collective agreement on reduction of oil production.

    Futures for gasoline rose to the highest level since 25 November at $1.3927 per gallon. Futures for diesel fuel rose to the highs of 10 December at the level $1.2225 per gallon.

    Iran did not agree to freeze oil production. On the contrary, this country is planning to reach “prior to sanctions” level, increasing production up to 4.2 million barrels per day. Next OPEC meeting can become disappointing, as if the meeting will not make progress, oil prices will go down again.

    Despite reduction of oil drilling activity, oil production in the USA is decreasing in a slower pace than expected. Oil producing companies cut costs but improved efficiency. New site of oil production was opened in the Gulf of Mexico.

    Oversupply of oil in the world continues. Oil reserves in the USA have reached the level of 500 million barrels for the first time since 1930.

    Current rise in oil prices will be considered part of the correction until the price goes down the key resistance levels of 41.50 and 44.50.

    The data from American petroleum Institute (API) on the US oil reserves this week will become known today at 23:30 (GMT 2).

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