Oil market- OPEC agreement may not be a factor
Brent oil prices showed positive dynamics for the last trading session. The oil market sentiment was bullish. Brent futures attempted to storm the resistance zone $ 49.7 50. To change the sideway formation, the oil market need not just a breakdown $ 50 level, but to settle above this mark for 1 2 sessions. In this case, a scenario with a return to higher levels will become possible, for example, $ 53 55.
According to yesterday's data from the US Energy Administration (EIA), commercial oil inventories decreased by 4.73 million barrels to 490.6 million. A decrease of 3.5 million barrels was expected (according to Bloomberg survey). American Petroleum Institute (API) inventories data were not confirmed (there was 1.6 million barrels increase). At the same time, crude oil imports increased from 7.61 million b / d to 7.99 million b / d of last week.
The output of official inventories data brought some positive and provoked an acceleration in the gains. Last year, seasonal decline in inventories was observed until August. This year the situation may be the same, so in the near future oil reserves are likely to continue to decline. Moreover, the rate of decline in 2017 exceeds last year's rates, which is formally positive factor for the oil as inventory growth will take place at faster rate too.
Among other news of the industry, there was announcement that Iraq intends to increase oil production to 5 million by the end of the year. This was stated by the Iraqi Oil Minister Jabbar al Laibi. Production in the country is now at the level of 4.379 million, slightly higher than the target level of Iraq's oil production under the OPEC deal (4.351 million). It is not clear how one can make such statements under conditions of the agreements concluded. The deal of OPEC countries begins to crackle down, given information that Ecuador decided to withdraw from the pact as well due to unstable economic situation in the country.
At the same time there was one more negative news for the oil. The head of the Libyan National Oil Corporation (NOC) said that the country plans to reach the production level of 1.25 million by the end of 2017.