29.10.202013:14 Forex Analysis & Reviews: Oil slightly rises after better than expected data from US DOE

The price of oil quotes increased Thursday morning slightly gains back losses from the previous day. The reason for the significant rebound of oil (by more than 5%) was the serious fears of investors on the increase in reserves in the US. Initial estimates have excited market participants, which somehow turned out different than the actual data, after which the situation on the market began to stabilize. Moreover, the continuously recorded outbreaks of COVID-19 cases around the globe and especially in the US remains a factor of pressure in the market. Traders are troubled by the repetition of lockdowns, which in the spring has led to negative consequences in the global economy.

All this, of course, greatly affected the short-term forecast for oil, which is not yet considered favorable, and the medium-term outlook also seems to be moving into the red zone. The reintroduction of the quarantine measures in European countries can undermine the general mood and the level of demand for black gold globally.

Also, at the moment, the problems of an excess supply of crude oil on the market and an acute shortage of reservoir installations for storing extracted oil, which has already entered the basic category, have not been solved in any way. All this may become the basis for an even sharper and deeper drop in the value of black gold, which is quite real in the very near future. Therefore, you should not be surprised by the negative mood, you just need to find a way to quickly overcome it, so that the accumulated problems do not become globally destructive.

The price of futures contracts for Brent crude oil for delivery in December on the trading floor in London rose 0.08% or $0.03, which sent it to $39.15 per barrel. The mark still remains below its strategically and psychologically important mark of $40 per barrel. Wednesday's trading lost 5.1% or $2.08. This value was the lowest since the beginning of the summer of this year.

The price of futures contracts for WTI light crude oil for delivery in December on the electronic trading platform in New York gained 0.24% or $0.09, which sent it to $37.48 per barrel. Wednesday's trading session ended with a decline of 5.5% or $2.18.

According to the official data from the US Department of Energy, the level of oil reserves in the country decreased by 4.3 million barrels last week, which ended October 23. This figure was the highest since mid-summer. The official data somehow turned out better than the initial estimates, which supported the mood of investors.

The level of gasoline inventories, on the contrary, decreased by 90,000 barrels, and distillates decreased by 4.5 million barrels. Initial estimates expected a reduction of around 700,000 barrels and 2.5 million barrels, respectively.

Meanwhile, crude oil reserves at the strategically important storage site in Cushing decreased by 400,000 barrels. However, the production of black gold in the US increased by 1.2 million barrels per day last week due to the recovery of the activity of certain installations in the country. Thus, the total volume of oil produced is now about 11.1 million barrels per day.