Crude oil prices plunge on Wednesday morning against the background of statistical data on the increase in raw material reserves in the United States of America. In addition, most of the attention of market participants is also focused on the progress of the negotiation process in OPEC on reducing the rate of production of raw materials. Recall that the meeting of representatives of OPEC countries was supposed to take place on Tuesday, December 1, but was moved to Thursday due to the need for additional analysis of the situation. All this together creates the very tension that pulls the price of black gold down.
The price of futures contracts for Brent crude oil for February delivery on the trading floor in London fell by 0.86% or $0.41, which sent it to $47.01 per barrel. Tuesday's trading ended with a drop 1% or $0.46, to $47.42 per barrel.
The price of futures contracts for WTI crude oil for delivery in January on the electronic trading platform in New York also went down by 1.01% or $0.45, sending it to $44.10 per barrel. Tuesday's trading closed with a decline of 1.7% or $0.79, which sent it to $44.55 per barrel.
According to the latest data from the American Petroleum Institute (API), the level of crude oil reserves in the US rapidly rose by 4.15 million barrels last week, which ended November 27. In addition, the organization's report also indicates that the level of gasoline and diesel fuel stocks has also increased.
However, official data from the Department of Energy will only be released Wednesday afternoon, and it is hoped that forecasts will not come true.
Along with this, consultations between oil-producing countries continue on the need to suspend the increase in oil production and return to the reduction again, since the market situation has not been very favorable lately. So far, all negotiations are being conducted by telephone, and no common solution has been found.
Earlier, preliminary agreements were reached between the organization's member countries, which related to limiting oil production in the amount of 7.7 million barrels per day for the first quarter of next year. This version of the agreement was planned to be approved on Tuesday, but now the issue will be resolved no earlier than Thursday. Additional analysis and consultation is necessary to make a final informed choice.
The delay in OPEC's decision has already had a negative impact on the mood of market participants, who were determined to quickly resolve the issue and considered it just a formality, since in the current difficult situation on the market, it is simply impossible to avoid maintaining the existing restrictions.
However, the very fact that the participants in the transaction suddenly need additional time to think indicates that there are disagreements and rather deep differences within, the overcoming of which can have an even more serious impact on the oil market and will lead to increased pressure on raw materials, which means a decrease in its cost. Of course, no one was prepared for this, and it is not known whether this situation could have been avoided.
