Oil quotes continue to update the annual lows and today descended below the levels which were before agreement of the OPEC in Vienna. Benchmark Brent broke through a significant round level of $50 and is now trading around $48. US West Texas Intermediate (WTI) went below $45, although after that price rolled back and now is above this level.
The most interesting is that the rockfall of oil prices wasn’t accompanied output, any data. On Tuesday, the American Petroleum Institute reported about inventories reduction in storages. The US Energy Information Administration also showed a reduction, although the values were more modest and less than forecasts, only 0.93 million barrel.
At the same time, oil production continues to increase in the US. In this regard, today from Baker Hughes expect information about the emergence of new active drilling rigs in North America. Together with this oil production in Libya recovery what exert additional pressure on oil quotes.
Looking at the situation, there is an impression, OPEC again will must have to save all. At the end of May, there will be a meeting at which the cartel will be obliged to provide a solution to the problem of regulation of supply and demand, which will be able to return prices to higher levels. Otherwise, oil quotes may be repeating the story of early 2016.