American and European major oil benchmarks corrected from previous plunge as US crude oil inventories, published by Energy Information Administration (EIA) dragged down prices due to extreme increase in crude oil stockpiles. Thus the report just confirmed part of ample global supplies, adding to bearish pressure on the market.
Although the OPEC countries started to weigh some cut in their exports, Iran sanctions lifting just added to the actual downtrend and only slight corrections as crisis in Yemen or Chinese demand could hold prices.
Iran is seeking oil & gas partnership with Chinese companies, supporting its possible increase of production. The country as the fifth largest oil producer in the world is expecting the output to be doubled from recent approximaltey 1M bpd in couple of months so Iranian Oil Minister Bijan Zanganeh is about to visit Beijing due to further oil deals
Old export ban in the US could just strengthen the trend, as the country still supports rising exports. ConocoPhillips is the last company to be granted approval for ultra-light domestic oil export. Generally we can see most pressure coming from the United States with its new oil policy together with shale oil revolution from couple of years ago.
Today, we can see West Texas Intermediate (WTI) futures with May 15 delivery up 1.86% at $51.36 a barrel, while Brent crude futures stood 2.04% higher at $56.69 a barrel.
We expect the downtrend to continue, due to global supply challenge, surpassing markedly demand, so there is no major upward move to be seen during next couple of months besides short-term corrections mostly related to geopolitical tensions.
For any questions of recommendation, feel free to write us on hello@goforex.eu
You can meet us at Forex Expo in Bratislava, in May 20-21, 2015
