Good News for Oil Investors as Price Report Gains
By Antonis Vasloos
The declining oil prices worried the investors all over the world. Despite the output production cut deal initiated by OPEC, the oil stockpiles refused to go down. The US Shale oil output continued to increase offsetting any advantage of oil production cuts.
Previously, oil faced a major decline as the price dropped heavily. Oil experienced the biggest loss in a single day for this month during the earlier session. However, following the European trading, oil prices bounced back. Numerous other news from various countries made the investors worry about the economic growth in the world.
During the OPEC production cut deal, Russia had agreed previously to cut back its production. However, the market is worried by the news that Russia may not be interested in cutting down production lower than the threshold value.
The EIA inventory data gains a lot of focus at this point. According to forecasts, a drawdown of about 1.8 million barrels is expected. The API data released yesterday provides hopes for the market as it showed a decline of 5.8 million barrels. This means that EIA data could easily follow the path of the API data. In that case, oil price may bounce back higher.
Brent futures were trading at $48.35 per barrel as it regained 1% of the 4% loss on Wednesday. The OPEC members may not be interested in reducing the production further, but the drawdown could be favorable for oil price. Gold price also reduced, reaching its lowest in two months.