Earlier today oil prices dropped a little as many investors closed down open deals on the black gold.
The Brent crude slid down to $58.05 per barrel, while the US crude reached $50.51. The Brent is now down almost 6% compared to the remarkable highs it reached a week ago.
Oil was able to reach new highs last week as traders hoped the issue of the oversupplied oil market would be resolved sooner than expected. However, right now a lot of the expectations of investors are not based on hard data, and frequent mood shifts lead to hasty profit-taking, which has noticeable effects on the price of oil.
Last week a major point in favor of lower supply was the Kurdish issue in Turkey, where Erdogan threatened to close down the incoming supply from Iraq, however, this has not been enacted yet. Oversupply has also been alleviated by OPEC’s efforts to curb their own production, with which they have been successful so far.
Nevertheless, every time oil prices recover, this motivates the United States to increase its shale oil production, driving oil prices back down.
Now is also a tricky time for oil, as many regions are still preparing their estimates for their fuel needs this coming winter.
