After the period of optimism regarding long-term forecasts about supply and demand on the market and a restoration of balance, the situation is changing. Due to a slowdown in the growth rate of demand for oil, analysts began to doubt in the possibility for market balance in the near future. Thus, after achieving the maximum for the last 2 years the prices once again began decreasing. However, the rates continue in the frames of a sustained upward trend. The last decrease that occurred this week looks like an ordinary price correction on the #CL chart.
This week oil prices came under pressure due to the revision of the International Energy Agency forecasts for global oil demand next year. According to the Agency, oil demand this and next year will not exceed 1.5 million barrels per day. Thus, supply will exceed demand in Q1 2018 in 600 thousand barrels, and in the second quarter it will be more than 200 thousand barrels. This forecast is contrary to OPEC's calculations, who stayed optimistic about global demand for oil in the near future.
In addition, the oil price was negatively impacted by recent data from the US, in particular, the growth of oil extraction in the United States. It is expected that the volume of shale oil extraction will be growing for a 12th consecutive month in December. Meanwhile, according to the American petroleum Institute (API), oil stocks in the U.S. have risen despite the forecasts: analysts were expecting the stock's decline by 2.2 million barrels.
At the moment it is difficult to say whether we would have a new crisis and a period of pessimism in the oil market, or oil continue to grow thanks to optimism in OPEC and their plans to extend the agreement to reduce oil extraction to the end of 2018, which would have certainly a positive effect on the market and the price of oil. Despite a number of factors against further growth of prices, the rates continue in the frames of an upward trend. The oscillators (RSI, MACD, Stochastics) unanimously point to the fact that the rates are in the oversold area now. So, the deals on the trend at the moment can be most effective in short-term trading.
