On the market again outrage. Yesterday’s volatility of oil quotes can be explained by the meeting of OPEC+. Market participants closely followed how the summit is held, what are discussing the exporting countries, what statements are making. Nervous movements of prices during important events is natural for markets, but further decline the black gold prices more than $3 is difficult to explain.
We can say that the market principle “buy on the rumor, sell on facts” works flawlessly, and as practice shows, it works even in the absence of any logic. If in the case of the press conference of the heads of central banks, can say that for the strengthening of national currency not enough more stringent statements, or some forecast was revised downwards, then in the case with the OPEC+ summit, everything is much more complicated.
The main goal of the meeting of the exporting countries was prolonged the agreement to cut production. The primary task was achieved, the agreement was prolonged, as the markets expected, until March 2018. This news is definitely positive for oil quotes. In addition, oil inventories in the US storage, according to the report of the US Energy Information Administration, decreased more than forecasts to 4.432 million barrel.
The possible reason for the decline black gold prices was the profit taking by market participants and closing of long positions, but we think that in the future oil prices will return to the upward movement, because all conditions for this are preserved.