empty
02.11.2020 12:13 PM
Pressure arises: oil rapidly cuts prices

This image is no longer relevant

Crude oil prices continued its negative dynamics, which has not been reversed for quite a long time. The second month of autumn was a failure for the oil products market. In October, Brent lost a total of 8.5% of its previous price, while WTI generally fell by 11%. As experts say, this is still far from the limit of the fall, since the hydrocarbon industry is now in a deep crisis.

The sharp decline in the cost of crude oil, which unexpectedly happened last month, occurred mainly against the background of serious concerns among market participants about demand, as well as the introduction of strict quarantine measures and lockdowns in most European countries. Last week, France and Germany have already decided on the necessity of the closure of the economy and the suspension of the main enterprises to cope with the situation.

The UK government, on the other hand, introduced a lighter version of the self-isolation regime starting November 5 for a period of four weeks. Whether it will be possible to cope with the rapid spread of coronavirus infection in this way is unclear. However, the fact that the economies of states will experience tremendous pressure is clear to everyone. This pressure will also affect the demand for crude oil, which in turn will negatively affect the black gold market as a whole.

Experts point out that the average level of crude oil consumption in Germany, France, and the UK is about 6 million barrels per day, which corresponds to about 6% of all world consumption, and this is a fairly large figure. Restrictive quarantine measures in these countries will indicate significant damage and a drop in demand for raw materials. And if other states, where the case of COVID-19 is no less complex, gradually begin to join the lockdown, then the crisis in the oil market will be even more global and deeper, and the withdrawal from it will be more difficult and longer.

The increase in the production of black gold in several countries also adds pressure and concerns among investors. Libya has already increased its production to 800,000 barrels per day and plans to bring this figure to 1.3 million barrels per day by the beginning of next year. Recall that at the beginning of the fall of this year, Libya's production amounted to approximately 100,000 barrels per day. The country also intends to raise its production level to 1.6 million barrels per day over the next year. The same level back in 2011 before the civil war. However, now is not the best time for such a build-up, since there is already enough negativity on the global hydrocarbon market. An oversupply will put a lot of pressure on the price level, which will inevitably go down.

In addition, the US presidential election creates another constraint. According to analysts, if Joe Biden wins, we should expect an increased portion of pressure on the oil market, since he is going to lift sanctions on Iran, which means that the supply of raw materials to the world market will grow by another 1.5 or 2 million barrels per day.

The statistics on the number of oil production facilities in the US are also not encouraging. For the sixth time in a row, capacity growth was recorded last Friday. Thus, the total number of installations for the extraction of raw materials amounted to 221 units, which is 10 units more than the previous figure. Of course, this cannot but worry investors who are concerned about such a rapid pace of production growth.

The price of futures contracts for Brent crude oil for delivery in January on the trading floor in London sank 3.27% or $1.24, which sent it to $36.70 per barrel. Friday's trading also ended in a negative zone with a drop of 0.8% or $0.32. In addition, the December contract came to an end on Friday, which also eventually decreased its value by 0.5% or $0.19.

The price of futures contracts for WTI crude oil for delivery in December on the electronic trading platform in New York also declined 3.66% or $1.31, which sent it to $34.48 per barrel. The previous trading ended in the red by 1.1% or $0.38, which caused contracts to fall to the lowest value in the last five months.

Maria Shablon,
Experto analítico de InstaForex
© 2007-2025
Summary
Urgency
Analytic
Maria Shablon
Start trade
Gana con los cambios en el valor de las criptomonedas con InstaForex.
Descarga MetaTrader 4 y abre tu primera operación.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    UNIRSE AL CONCURSO

Recommended Stories

El futuro del bitcoin, ¿predecible? Disminución de la volatilidad y una negociación "aburrida"

Según algunos criptoanalistas, el futuro de la primera criptomoneda parece predecible y en parte aburrido. Los expertos creen que el uso del Bitcoin en los ETF bursátiles

Larisa Kolesnikova 12:01 2025-07-28 UTC+2

El Bitcoin enfrenta predicciones de caída. Trampas para los traders en el BTC

Actualmente, el mercado de criptomonedas experimenta cierta volatilidad, aunque muchos analistas anticipan una intensificación de la tormenta. Advierten a los traders sobre posibles trampas de precios en la dinámica

Larisa Kolesnikova 13:03 2025-07-24 UTC+2

15 % en lugar de 30 %: Trump y la UE están cerca de un acuerdo sobre aranceles

La UE y Estados Unidos finalmente se acercan a la línea de meta en las negociaciones sobre los aranceles comerciales: se está discutiendo una tarifa de compromiso del 15 %

Аlena Ivannitskaya 07:59 2025-07-24 UTC+2

Nuevo récord en Wall Street: el S&P 500 y el Nasdaq se disparan gracias a Alphabet

Los índices bursátiles estadounidenses S&P 500 y Nasdaq cerraron el lunes en máximos históricos. La razón fue un aumento del interés de los inversores en las acciones de los líderes

11:58 2025-07-22 UTC+2

Los índices estadounidenses irrumpen en el verano: sexto récord del S&P 500 y auge de los chips

El S&P 500 estableció su sexto récord. El Nasdaq mostró seis de los mejores resultados. Las acciones de empresas de chips se dispararon. Las acciones de PepsiCo y United Airlines

11:20 2025-07-18 UTC+2

Turbulencia del bitcoin: de $123 000 a $115 000. El criptomercado se mantiene en silencio

La primera criptomoneda volvió a demostrar maravillas de volatilidad: en un par de días el Bitcoin experimentó un ascenso hasta los $123 000 y una caída hasta los $115

Larisa Kolesnikova 11:47 2025-07-16 UTC+2

El Bitcoin supera los $120 000, el Nasdaq alcanza nuevos máximos: el mercado ansía impulso

El martes abre una serie de datos económicos clave y la temporada de informes. El Nasdaq muestra su séptimo cierre récord desde el 27 de junio. Las acciones de criptomonedas

11:59 2025-07-15 UTC+2

Boom bursátil: Nvidia supera los $4 billones, el Bitcoin no se queda atrás, Dow y S&P suben

Los índices suben: el Dow Jones creció un 0,43 %, el S&P 500 un 0,27 %, y el Nasdaq un 0,09 %. Nvidia cerró la sesión. Pronóstico positivo de Delta

10:33 2025-07-11 UTC+2

Trump vuelve al ataque: arancel del 50% sobre el cobre y nuevos golpes a China y la UE

Trump anunció aranceles del 50% sobre la importación de cobre, nuevos aranceles sobre semiconductores y productos farmacéuticos. Declaró que las negociaciones con la UE y China son exitosas. Japón

10:28 2025-07-09 UTC+2

De $4 a $100 mil por moneda – ¿por qué están despertando las carteras BTC «antiguas»?

Siete carteras de Bitcoin «antiguas», creadas en abril y mayo de 2011, se activaron repentinamente. En conjunto, movieron 70 000 BTC – el equivalente a $7,6 mil millones al tipo

Svetlana Radchenko 07:25 2025-07-07 UTC+2
¿No puede hablar ahora mismo?
Ingrese su pregunta en el chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.