According to US Energy Department, last week oil and oil products reserves in the USA increased by 9.357 million barrels. Statistics released by API showed that oil reserves have increased by 8.7 million barrels.
Today’s main event is a speech by the head of the US Fed Janet Yellen (18:20 GMT 2). At 22:30 API will release oil reserves data for a week. It is likely that oil will be under pressure today due to the increase of oil reserves, expectations of the speech by Janet Yellen and uncertainty about the meeting of oil market representatives in Doha on 17 April.
Oil prices will be affected by the following factors:
- Oversupply of oil in the global oil market.
- The increase in the oil reserves of the USA up to the historical highs over the last 80 years.
- Oil production level remains high.
- US Fed is inclined to gradually tighten monetary policy, which will boost the rise in the USD.
- Collective agreement on freezing oil production level is in doubt.
Therefore, despite recent growth, the price of oil will remain under pressure in the medium-term. It is possible that downtrend will resume and the price of crude oil Brent will reach the lows of 27 USD per barrel.
In advance of the meeting of representatives of oil producing countries in Qatar on 17 April the market is uncertain. Large investors have taken “wait and see” position, which was demonstrated on the CFTC, where short positions have been reduced by 28% and long positions have increased only by 2% last week.