Oil prices fell by more than a percentage
Prices of oil futures have fallen today, as traders decided to take profits after a three-day rise and achieve highs in 2016 due to lower crude oil stocks in the US and other supply disruptions. Increased US dollar also put pressure on the price of oil.
The market also continued to win back yesterday's data on US petroleum reserves, which exceeded forecasts. Recall, the US Department of Energy said that during the week 28 May - 3 June crude oil inventories fell by 3.2 million barrels to 532.5 million barrels. Experts predicted a decline of 2.7 million. Barrels. Oil reserves in Cushing terminal fell by 1.4 million barrels to 65.6 million barrels. Gasoline stocks rose by 1 million barrels to 239.6 million barrels. Analysts had expected stocks will fall 500,000 barrels. The utilization of refining capacity increased by 1.1% to 90.9%. Analysts suggested that the figure will rise to 0.6%. Meanwhile, oil production in the US rose to 8.745 million barrels per day versus 8.735 million barrels per day in the previous week.
Earlier this week, the Energy Information Administration of the US Department of Energy raised its forecast for oil prices for 2016. According to the EIA, the average crude oil price of WTI in 2016 will amount to $ 42.83 per barrel, Brent - $ 43,03 per barrel. In May, the average price of WTI this year is expected to reach $ 40.32 per barrel, Brent - $ 40,52 per barrel. In 2017, according to the EIA forecast, the average price of a WTI oil and Brent will be $ 51.82 per barrel.
Since the beginning of 2016 the price of oil WTI and Brent has risen by more than 80% of the multi-year lows reached earlier, as the decline in production and supply disruptions have increased hopes that an excess of oil supply, is finally starting to subside.
Investors' attention is also switched to the Fed meeting. Experts expect that the Fed next week will keep rates unchanged, and many continue to believe that in July, rates will remain at the same level. Fed futures rates suggest that the probability of a rate hike in June was 4%, and the chances of an increase in rates are estimated at 24% in July. Recall increase in interest rates would strengthen the dollar and will put pressure on commodities such as oil.
WTI for delivery in July fell to $50.76 a barrel. Brent for July fell to $52.09 a barrel.