Oil prices rise against the dollar weakness and the threats in Nigeria

The oil continued to rise on this Tuesday, supported by the dollar weakness, the threats to the production in Nigeria and the attitude of Saudi Arabia, are the factors that could strengthen the price per barrel at $ 50, the analysts said.

By 11:30 GMT this Tuesday, a barrel of the Brent North Sea for the August delivery was worth of $ 51.08 at the Intercontinental Exchange (ICE) in London, 49 more than at the close on the Monday cents.

In the electronic exchanges of New York Mercantile Exchange (Nymex), a barrel of “light sweet crude” (WTI) for delivery in July it gained 41 cents meanwhile, to a $ 50.10.

The oil continues to gain ground because the concern about the attacks on the oil infrastructure in Nigeria and the weak dollar have helped to support the prices and push the Brent to its highest in the past seven months level, said Michael Hewson, a CMC Markets analyst.

The PVM According to the analysts, the Nigerian oil production would have fallen by 170,000 barrels a day after the attacks on the pipelines last weekend.

The consequence is that the Brent seems to hold over $ 50 a barrel on Tuesday – the effectively reached $ 50.94, a record since the 12th of October of the year 2015 and WTI should do the same, the experts say .

The oil prices also benefit from the depreciation of the dollar, pronounced this Monday a speech by the president of the United States of America Federal Reserve (Fed), which could finally give up the raising rates in this month.

the oil prices

This postponement, if confirmed, the tends to depreciate the dollar and in turn in favor of the oil purchases, which are traded in dollars that is cheaper for the investors using other currencies accordingly.

WTI, the United States of America benchmark, has also been affected by the drop in the reserves refinery Cushing (Oklahoma), according to the estimates by the Genscape cabinet.

The price of the WTI “it could increase if this information confirms that the American Petroleum Institute (API) and the Energy Information Administration on this Wednesday”, according to the analysts at PVM.

Generally, the current optimism in the oil market is the result of the last week meeting of the Organization of Petroleum Exporting Countries (OPEC).

The crude futures have risen nearly doubled since the month of January, when they touched its lowest level since the late year of 2003, driven by the supply shortages in Canada, Venezuela, Libya and Nigeria.

At that meeting, Saudi Arabia, represented by its new Minister of Energy, Khaled Faleh, adapted to a “less aggressive” strategy on its oil production, which until now was seeking at all the costs to maintain its market share, says Michael van Dulken, an analyst in Accendo Markets.

the oil prices2

In the month of May, the oil prices had a similar behavior when they rose more than a 2%, its highest since November of the year 2015 level, increasing the production disruptions of the Nigerian crude and after Goldman Sachs said that the market ended nearly two years of oversupply and went on to the deficit.

At 11:18 GMT, the Brent crude futures rose a 2.05 percent or a dollar to $ 48.83 a barrel. The oil futures in the United States of America gained a 2.08 percent, or 98 cents to $ 47.19 a barrel.

The interruptions in the supply of up to 3.75 million barrels per day (bpd) worldwide have ended up with a glut that caused the oil prices to fall by up to a 70 percent between the year 2014 and early the year 2016.

The disruptions caused a shift in the landscape of Goldman Sachs, which had long warned that the global storage would reach a full capacity and another collapse in the prices to $ 20 per barrel.

However, Goldman Sachs warned that the market would return to surplus in the first half of the year 2017, for prices around the $ 50 per barrel in the second half of the year 2016 would lead to an increase in the exploration and the production activity ad.

In Nigeria, the production has fallen to its lowest level in decades after the several acts of sabotage.

the oil prices3

In America, they warned that the United States officials are increasingly concerned about the possibility of a political and economic collapse in Venezuela, amid the low oil prices.

The price of the Venezuelan oil culminated earlier this week at $ 40, a dollar more than at the end of last Friday when the “criollo” crude was quoted at $ 39.

Last week, the Organization of Petroleum Exporting Countries (OPEC) failed to agree on a clear strategy of the production, but the traders said that Saudi Arabia’s commitment is not to flood the market that had given the support to the oil.

Add a Comment

Your email address will not be published. Required fields are marked *