While market participants are waiting for the release of NFPR (Non-Farm PayRolls), oil prices are gradually declining since the opening of the trading day and at the beginning of the European session.
On Thursday, Saudi Arabia lowered export prices of the high quality crude oil for Europe and Asia. Saudi state company Arabian Oil Co. (Aramco) has published official list of selling prices, which showed that the price of some oil grades have been reduced from 0.2 to 0.75 USD per barrel.
For Iran, the European region is also of great importance; the country is going to increase exports of oil to Europe after lifting of the Western sanctions. Iran has already announced that it will not reduce oil production until its exports exceeds the current level (which is 1.1 million barrels per day), by 1.5 million barrel.
Russia has also reached the highest levels of oil production since the Soviet times and the rumors about the upcoming negotiations between Russia and Saudi Arabia on the reduction of oil production have been belied by OPEC representatives.
Demand exceeds supply in the oil market. According to the US Department of Energy, US stocks of crude oil and oil products have grown by 7.7 million barrels over the last week, which is over 500 million barrels for the first time over 80 years.
At the close of trading yesterday futures for Brent in ICE Futures Europe fell in price by 1.7% up to the level of 34.46 USD per barrel. Yesterday’s price spot dropped to 34.30. Due to the increase of oil production in the world, slowdown of the global economy and increasing completion in the oil market, the price of oil goes back to the downtrend. If the data on NFPR (Non-Farm PayRolls) will be higher than expected, interest rate in the USA can be increased in March. In this case the USD will strengthen while oil price will go down to the recent lows of 27.00.Publication source