On Wednesday, August 5, trading in the global energy market is accompanied by an increase in world oil prices. In the middle of the day, quotations of crude oil of the benchmark Brent and American WTI rose by 3.5% - to $ 46 and $ 43.3 per barrel, respectively. Values are the highest since March 6.
The sharp rise in oil prices began the night before. According to experts interviewed by RT, global investors reacted violently to reports of an explosion in the seaport of Beirut.
“Now, with the announcement of the number of victims and the calculation of losses from the explosion, we see that among investors, panic has increased. Many players are afraid of interruptions in the supply of energy raw materials, so they buy oil contracts in advance, ”explained Yuriy Mazur, head of the data analysis department of CEX.IO Broker.
At the same time, the reaction of market participants to the events in Lebanon may be temporary, says Anna Bodrova, senior analyst at the Alpari Information and Analytical Center. Against this background, she said, in the coming days, the price of oil may slightly adjust.
“The Beirut tragedy could become a speculative factor of influence on commodity prices, if there were prerequisites for exacerbating tensions in the Middle East. However, now there is no such risk, so after an emotional reaction to the news of the explosion, the price of a barrel of Brent may return to the range of $ 43-44, "Bodrova said in an interview with RT.
- Destruction in the port of Beirut
- © Mohamed Azakir
One of the reasons for the observed growth in quotations was also a sharp decline in raw materials reserves in the United States. This point of view in an interview with RT was expressed by the stock market expert "BCS Broker" Igor Galaktionov.According to a report by the American Petroleum Institute (API), the volume of oil reserves in the United States fell by 8.5 million barrels over the week. The fall became the maximum since August 2019.
In addition, analysts explain the positive dynamics of prices by the gradual restoration of the balance of supply and demand in the global hydrocarbon market. In their latest report, experts from the Organization of Oil Exporting Countries OPEC improved their forecast for demand for raw materials in 2020. According to the alliance's estimates, by the end of the year, the consumption of energy resources in the world could be reduced by 8.95 million barrels per day - to 90.72 million barrels per day. Earlier, OPEC had expected a decrease in the indicator by 9.08 million - to 90.59 million barrels per day.
Moreover, as Anna Bodrova notes, market players react to the actions of the countries participating in the OPEC + deal. As a reminder, since May 1, the members of the agreement have resumed their partnership and, in order to combat the global surplus of raw materials, they are reducing oil production. The actions of the states should also lead to the restoration of the balance of demand and supply of hydrocarbons in the world market and thereby support the rise in prices after the spring collapse.
From May to July, production of raw materials in the countries participating in the agreement decreased by 9.7 million barrels per day compared to the level of October 2018. Since August, the states have agreed to increase production somewhat (by 2 million barrels per day), but at the same time retained the restrictions.
“Since August 1, daily production at the level of oil producing countries has become broader in accordance with the agreements reached earlier. Now investors want to understand whether this suits the oilmen themselves, and what will happen to prices next. The market believes that OPEC + may pay attention to additional opportunities to curb the growth of daily production, and this is today the key factor in the growth of quotations, "Bodrova added.
Note that the sharp rise in oil prices had a positive impact on the dynamics of the Russian currency. So, at the auction on Wednesday, the dollar rate on the Moscow Exchange fell by 1% - to 72.8 rubles, and the euro rate - by 0.5%, to 86.3 rubles.
As Ilya Zaporozhsky, an expert at the Academy of Finance and Investment Management, told RT, in the near future, the threat of a second wave of coronavirus may exert some pressure on oil prices. At the same time, the analyst does not exclude that within the next few weeks prices may reach $ 47 per barrel, and by the end of the year - $ 52.
According to experts, a further rise in oil prices could provide additional support to the ruble. According to Anna Bodrova's forecast, in August the dollar exchange rate will mainly fluctuate in the range of 71-75 rubles, but at the same time it may temporarily drop to 70 rubles. In turn, the euro will be in the corridor of 83-88 rubles, the analyst said.
In turn, Ilya Zaporozhsky believes that by the end of the year the rates may drop to 68 rubles per dollar and 78 rubles per euro.