23.05.201912:43 Forex Analysis & Reviews: Jump over the abyss: the oil market is on the verge of collapse

According to some analysts, the black gold market is preparing for a large-scale collapse. Experts believe that the first alarming bell is the collapse of quotations by more than 2%. This is the most significant drop in the last two weeks, experts remind.

Prices for black gold began to fall in the morning on Thursday, May 23, and the publication of oil and oil products from the US Department of Energy gave acceleration to this process. They have increased in all three main points: crude oil reserves increased by 4.7 million barrels, gasoline - by 3.7 million barrels, and distillates - by 0.8 million barrels. At the same time, experts recorded an increase in oil production, which updated the new record. Over the past week, 12.2 million barrels per day were produced in the United States. Sales of oil from the strategic reserve by the US Department of Energy reached 1.2 million barrels per day.

The report says that America has resumed purchasing Venezuelan oil. Over the past week, deliveries of black gold from Venezuela amounted to 49 thousand barrels per day. According to experts, this is not a very large volume: a year earlier, deliveries reached 352 thousand barrels per day. In April of this year, the United States also made small purchases of oil from Venezuela (71-191 thousand barrels of oil per day).

At the moment, experts are fixing one of the important factors for preparation of a strong decline in the market of black gold. It concerns oil futures. Recall that this financial asset is almost always traded in the general trend with the US stock market. Currently, the situation in this segment is extremely unstable. If the trade war between the United States and China will cause powerful sales in the securities market, then oil quotes will fall after them, analysts caution.

The change in sentiment in the market is confirmed by the fact that its participants close long positions and form short ones, that is, they'd start the game for a fall. On Thursday, during the Asian session, trading is conducted in a negative way. At the moment, Brent and WTI futures have lost a little more than a third percent. At the same time, futures on US stocks also reduced.

According to the analysts, the market is currently having some confusion. Experts do not exclude the fact that large players artificially keep quotes at acceptable levels. Experts find it difficult to predict further developments and urge to closely monitor the situation on the market.