07.10.202011:45 Forex Analysis & Reviews: Oil prices slide amid worsening weather conditions in Gulf of Mexico

Crude oil prices moved to a negative correction on Wednesday. Over the past two trading days, black gold has been rapidly trying to make up for all the losses it suffered over the previous two weeks. Tuesday's trading session was overwhelmingly positive, supported by news of worsening weather conditions in the Gulf of Mexico. Another major hurricane is approaching the US coast, which will again temporarily suspend the operation of oil production facilities. Most likely, the peak of the elements will be at the end of this week. This means that oil demand will be supported by a somewhat limited supply due to the natural disaster.

To date, about 29.2% of the stations for the extraction of raw materials in the Gulf of Mexico have suspended their activities, although the hurricane has not yet hit the coast in full force.

Another factor that causes investors to worry about the supply of raw materials in the market is the news about workers ' strikes in Norway. Earlier it was reported that due to this conflict, oil production has already stopped at four fields in the North sea.

In addition, US President Donald Trump announced on Tuesday that the negotiation in the adoption of the new stimulus package in the US is again postponed until the end of the country's presidential elections.

With the negotiations again at an impasse, investors' attention is currently shifted on the weekly report of the US Department of Energy. The official data should reflect whether there is an increase or decrease in reserves of raw materials, gasoline, and distillates in the state.

In the meantime, analytical companies offer their initial forecasts in this regard. The American Petroleum Institute suggested that the level of oil reserves for the previous week, which ended October 2, increased by about 951,000 barrels. The level of gasoline, on the contrary, decreased by 867,000 barrels, and distillates fell by 1.03 million barrels. Oil reserves at the Cushing storage facility also increased by 749,000 barrels.

Analysts surveyed by S&P Global Platts, on the contrary, believe that the level of crude oil in the US will be reduced by 2 million barrels. The level of gasoline will also go down by 800,000 barrels, and distillates will decrease by 2.9 million barrels.

However, until the official report of the authorities is published, it is difficult to judge which of these experts was closer to the truth.

The price of futures contracts for Brent crude oil for delivery in December on the trading floor in London plunged 1.48% or $0.63, which moved it to $42.02 per barrel. Tuesday's trading ended positively for the brand with an increase of 3.3% or $1.36, which left the final price at around $42.65 per barrel. And given that a day earlier, an increase of 5.1% was recorded, we can assume that oil almost recouped all its losses, but, unfortunately, could not recover from the new shock.

The price of futures contracts for WTI crude oil for delivery in November on the electronic trading platform in New York also went down by 1.79% or $0.73. The current price has moved to the level of $39.94 per barrel. Tuesday's trading session was more than successful with a growth of 3.7% or $1.45, which left the final price at $40.67 per barrel. The increase of the day before was also significant at 5.9%.