FX & CFD trading involves significant risk
Oil prices moderately decreased, returning to the level of $ 60 per barrel (mark Brent), after rising more than 3 percent earlier today, as many traders are wary of further increase. It is worth emphasizing, Brent prices dropped by 50% since June due to increase oil production in the US, failure of OPEC to reduce production and the weak global economic growth. On Wednesday evening, world oil prices rose markedly, exceeding the level of $ 63 (Brent). However, analysts attributed this jump in prices is not fundamental factors, but rather to the high volatility in the market.
Initially, the rise in price of oil today was caused by reports that the company plans to reduce investments in exploration after a sharp fall in prices. Chevron Corp indefinitely postponed plans to drill in the Beaufort Sea, and Marathon Oil in the coming year will reduce capital expenditures by 20 percent. Canadian oil company Husky Energy, MEG Energy and Penn West Petroleum also plans to reduce investment.
"It seems that investors prefer to support near $ 60 a barrel," - said Daniel Ang, an investment analyst at Phillip Futures, adding that the decline in investment in production will be felt in the market in the second quarter of 2015.
Support prices have also had statements of the minister of oil of Saudi Arabia, who reiterated that OPEC or Saudi Arabia would be difficult to reduce the volume of production, and added that the market is experiencing temporary difficulties, mainly due to the weakening global economy.
Another factor was the growth of the statement of Russian President Putin, who assured that the Russian economy will recover and stop the fall of the national currency, and noted that the current crisis will last no more than two years.
Cost of January futures for US light crude oil WTI (Light Sweet Crude Oil) dropped to 55.58 dollars per barrel on the New York Mercantile Exchange.
January futures price for North Sea Brent crude oil mix fell by $ 0.51 to $ 60.15 a barrel on the London Stock Exchange ICE Futures Europe.
All posted material is a marketing communication solely for informational purposes and reliance on this may lead to loss. Past performance is not a reliable indicator of future results. Please read our full disclaimer.