The oil market stopped growing and decided to take a break
The oil market has been climbing the previous three days. During this time, quotes rose by an average of about 3.5-4.5%. Oil prices were supported by expectations for oil demand. Although the pandemic continues to pose uncertainty for the oil market.
Earlier, the OPEC + ministerial monitoring committee recommended that the alliance maintain the current terms of the agreement for May-July. In addition, the OPEC + technical committee raised its forecast for growth in global oil demand in 2021. Previously, it was 5.6 million barrels per day, and now 6 million barrels per day.
Statistics on commercial reserves and production in the United States also supported oil prices. According to the country's Energy Ministry, in the week ended April 23, stocks grew weaker than expected – by 0.1 million barrels. And production fell by 100 thousand barrels to 10.9 million barrels per day.
Some support to the market was also provided by statistics from the United States. She pointed to a strong economic recovery. US GDP in the first quarter of 2021 increased by 6.4% on an annualized basis. This is evidenced by preliminary data from the US Department of Commerce
“This week there was a flood of strong data and supportive events in the US. But that likely obscured the growing global risk of relatively more contagious variants of COVID-19. Especially the one that caused chaos in India. Having reached a six-month peak, oil was ready for a breather, ” quoted Bloomberg as saying Vandana Hari, founder of Vanda Insights.
Why the oil market suddenly began to decline
“However, weaker than expected PMI data from China's manufacturing sector negatively affected sentiment,” notes DailyFX strategist Margaret Young, quoted by S&P Global Platt.
The renewed rise in coronavirus infections in key markets, especially India, is also prompting investors to be wary.
Oil market pressures are also coming from fears of worsening epidemiological conditions in other countries, including Japan and Brazil, analysts say ANZ. They note a possible deterioration in demand in both countries amid an outbreak of disease and new restrictions. : ///
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