Analysis of the oil market. "Black Gold" after yesterday's fall comes to life

January futures for Brent oil added 1.51% and cost 63.48 dollars.

The cost of futures for WTI crude oil in January rose by 2.22%, amounting to 54.62 dollars.

The spread between the current contracts for Brent and WTI oil is about $ 8.2 in favor of the first.

On the eve of the cost of oil rose, driven mostly by purchases in anticipation of a pullback after Tuesday's reduction by 6%. The cost of Brent consolidated around 63-63.5 dollars per barrel after Tuesday's minimum of 61.7 dollars. The current range is limited to the levels of 61.7 and 64.5 dollars. When you exit the range, you should pay attention to the situation. It is likely that this technical signal will provide an opportunity to assume further dynamics.


Low prices attract speculators who seek to catch the "bottom". However, it's too early to talk about a full reversal, as the news background continues to retain a negative connotation.

Today, the market's attention has attracted Donald Trump's joyful announcement on Twitter. The American president thanked Saudi Arabia for the low cost of oil and called for its even lowering.

"Oil prices getting lower. Great! Like a big tax cut for America and the World. Enjoy! $ 54, was just $ 82. Thank you to Saudi Arabia, but let's go power" - Donald J. Trump.

Earlier, a number of media outlets, citing their sources, said that at the next meeting in Vienna on December 6, OPEC + countries will discuss a decline in production by 1.4-1.5 million barrels per day in order to avoid the threat of surplus and support the cost of oil. At the same time, the market does not yet lay these expectations in the quotes. Also, there were no statements from state representatives, and the current balance of forces makes one doubt that all parties to the transaction can quickly come to an agreement.

Oil futures with delivery in 18 months are again traded in contango to contracts with the nearest delivery. The last time such a situation could be observed briefly last week after a strong decline, and before that, there was a long period of backwardation.

Contango says that the market assesses current price levels as lower than the average value in a year and a half. So far, the excess of long-term contracts is insignificant, but the fact itself can already have an impact on the speculators' view of the market.

Today, the current data on weekly oil reserves in the United States from the US Energy Information Administration (EIA) came out. Commercial stocks of crude oil rose again, despite the fact that the data from the API showed a decrease a day earlier. Last week, growth was 4.85 million barrels, which was higher than the expectations of experts, who predicted a growth of 2.94 million barrels. Total reserves in America amounted to 446.91 million barrels.

Exports of crude oil for the week fell by 81 thousand barrels per day, amounting to 1.97 million barrels. The volume of imports rose by 102 thousand barrels per day, to 7.55 million barrels per day.

According to EIA, gasoline inventories sank by 1.3 million barrels, commercial distillate inventories decreased by 0.08 million barrels. Refinery utilization rates rose to 92.7% from 90.1%. Oil production last week remained at the previous level of 11.7 million barrels per day.

The first reaction of the market to the statistics was negative, but the drawdown was quickly bought out. This morning, futures for Brent crude traded below yesterday's close by 0.3%.

The material has been provided by InstaForex Company -