Today oil prices are once more moving in a downward direction. The decrease in the price of oil is caused by rising production and reserves in the United States, as well as the threat of a lower demand from China, where an economic slowdown is observed. The industrial data from China came in at 5.4% for April, which is lower than expected, and China is the biggest importer of oil in the world, so less industrial demand there will definitely affect the world.
The United States have been steadily increasing their weekly output over the last few years. However, investors were still surprised by last week’s oil reserves report from the American Petroleum Institute. According to the data, the US increased their crude oil reserves by 8.6 million last week, leading to a total output level of 477.8 million barrels. It was expected that the number would actually decrease.
There have also been some surprising supply cuts in OPEC, which involved incidents with oil pumps in Saudi Arabia and oil tankers near the United Arab Emirates. Unease is growing in the Middle-East due to the US pressure on Iran to reduce its oil exporting activities.
The price of the Brent crude reached $71.60, while the WTI was at $61.33 per barrel.
