Since the opening of today’s trading day oil prices go down prior to the release of the US labor marker data at 14:30 GMT 2).
After reaching new annual highs at the level of 48.40 at the end of April, oil prices have been declining for the fifth consecutive session.
On Wednesday, US Department of Energy released the data showing that during the week of 23-29 April, oil reserves in the USA rose up to 2.784 million barrels. Mass media issued information that OPEC countries ceased to consider possibility of freezing oil production at the current level.
According to OPEC there are signs that the ratio between supply and demand of oil is getting more balanced.
However, in April, oil production in OPEC countries has reached the record level since 1989 and oil reserves in the USA have been maintained the highest since 1930 at the level of 500 million barrels.
In the past few weeks oil prices have reached new annual highs amid disruption of oil supply in some regions of the world and amid expectations of reduction in oil production in the USA. The rise was also triggered due to the failure of negotiations in Doha when Saudi Arabia required the reduction of oil production in Iran. Earlier, Iran said that attempts to freeze oil production are ridiculous. Iran continues to increased oil production, trying to reach the level of 4 million barrels per day.
The level of oil production in the world is high and a tendency of the increase in the US oil reserves continues.
The rise in oil prices can convince some oil producers to increase production in order to protect their market share. In this case oversupply of oil will increase in the world.
If NFPR (released at 14:30 GMT 2) turns out to be below the forecast of 200 000 new jobs, oil prices may grow, supported by this news.