We are currently seeing a growth in the price of crude oil, but in weekly terms it has suffered one of its biggest losses for this calendar year. Despite the daily increase, investors expect oil prices to decline in the long term. The factors in favor of a decrease in the value of oil include the negative sentiment on the markets due to disappointing fundamentals from multiple directions, which indicate a slowdown in the global economy, and the constantly increasing oil reserves in the United States.
The United States is not part of the Organization of Petroleum Exporting Countries, and as such has never been bound by OPEC’s agreement to keep production levels low. On the contrary, production per week kept increasingly and currently the oil inventories in the States have reached their highest level in almost two years. Keeping the market well-supplied, especially considering the lower demand (caused by the economic slowdown in China and in Europe) will tip the scales and likely push oil to new lows in the future.
Still, today the Brent crude rose to $68.61, while the WTC reached $58.66 per barrel.
